MP1/JMH/sid 2/25/2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Authority, Among Other Things, To Increase Revenue Requirements for Electric and Gas Service and to Increase Rates and Charges for Gas Service Effective on January 1, 2003. (U 39 M)	Application 02-11-017 (Filed November 8, 2002)
Investigation on the Commission's Own Motion into the Rates, Operations, Practices, Service and Facilities of Pacific Gas and Electric Company.	Investigation 03-01-012 (Filed January 16, 2003)
Application of Pacific Gas and Electric Company Pursuant to Resolution E-3770 for Reimbursement of Costs Associated with Delay in Implementation of PG&E's New Customer Information System Caused by the 2002 20/20 Customer Rebate Program. (U 39 E)	Application 02-09-005 (Filed September 6, 2002)

ASSIGNED COMMISSIONER'S RULING

GRANTING THE UTILITY REFORM NETWORK MOTION FOR

AN INVESTIGATION INTO PACIFIC GAS AND ELECTRIC

COMPANY'S BILLING AND COLLECTION PRACTICES

This Ruling grants the November 9, 2004 motion for an investigation into the billing and collection practices of Pacific Gas and Electric Company (PG&E) filed by The Utility Reform Network (TURN). This action is in response to the Motion filed by TURN as well as the increasing number of complaints received by the Commission's Consumer Affairs Branch (CAB) and issues raised in response to Advice Letter (AL) 2550-G/2534-E filed by PG&E on July 20, 2004. We will consolidate this investigation with Order Instituting Investigation (I.) 03-01-012, which was opened as a companion investigation to PG&E's test year 2003 general rate case.

This fact-finding proceeding will allow the Commission to investigate whether PG&E's past conduct with regard to billing and collecting issues, including its collection of deposits from customers, is consistent with the orders and regulations of the Commission. As part of this review, the Commission will consider PG&E's request for authority to implement a late payment fee.¹ This proceeding is categorized as ratesetting. PG&E is placed on notice that evidence taken in this proceeding may be the basis for findings and Commission orders. If the investigation reveals that the conduct of PG&E violated the statutory laws or rules or orders of the Commission, it may levy fines and/or order PG&E to issue refunds. Other issues, including PG&E's request for a late payment fee, may be addressed on a prospective basis.

Background

On October 12, 2004, Executive Director Steve Larson sent a letter to PG&E, stating that numerous customer complaints to this Commission indicate that a large number of PG&E customers have received delayed or estimated bills. The letter stated that preliminary inquiries by Commission staff have not satisfactorily resolved the reasons for these bills, which are causing PG&E to demand high deposits and/or onerous payment arrangements from some customers. The Executive Director requested that PG&E "suspend all collection activities associated with overdue amounts related to these bills until we have completed our inquiry," and "stop collecting overdue amounts from residential customers that date back more than the 90 days provided in Rule 17.1."

In response to the Executive Director's letter, PG&E filed AL 2581-G/2568-E on October 15, 2004, proposing revisions to gas and electric Rules 17.1 and 17.2 and the addition of a new Rule 17.3. PG&E's proposal sought to: (1) add language to Rule 17.1 indicating that billing error includes failure to issue a bill, actual or estimated; (2) add language to Rule 17.2 stating that meter or billing errors defined under Rule 17.1 do not constitute unauthorized use; and (3) create an additional rule, Rule 17.3, which would permit PG&E to make billing adjustments covering a period of three years.

The Commission granted PG&E's proposal in part and denied it in part.

In particular, the Commission approved PG&E's proposed change to Rule 17.1 to reflect that failure to issue a bill constitutes billing error. The Commission found that "consistent with the policy underlying its existing tariffs, failure to issue a bill shall be treated as billing error." The Commission also noted that "[T]his is consistent with existing CPUC policy, tariffs, and requirements, including the requirements of D.86-06-035."²

The Commission also adopted a modified version of PG&E's requested changes to Rule 17.1 concerning exclusions from billing error. The Commission rejected PG&E's proposed language defining exclusions, but agreed with PG&E on the narrow point that delayed bills resulting from a natural or man-made disaster should be excluded from billing error. Once again, the Commission noted that "[T]his tariff change reflects the proper interpretation of existing tariffs."

The Commission also expressed concern that PG&E's responses to complaints received by CAB indicate that PG&E may have improperly relied on the phrase "unusual conditions" in Rule 9C to justify estimating bills indefinitely when billing error occurred and ordered PG&E to clarify Rule 9C and Rule 17 to remove the phrase "unusual conditions."

The Commission rejected as vague PG&E's proposed Rule 17.3, which would have allowed PG&E to back bill customers for a period of three years for "any situations where a customer's bill requires adjustment but is not defined as billing error, meter error, or unauthorized use."

In conclusion, the Commission stated that "the tariff changes we authorize in this resolution are consistent with existing CPUC policy, tariffs, and requirements, including the requirements set forth in D.86-06-035. These changes simply reflect the proper interpretation of existing tariffs." The Commission ordered PG&E to file a report in A.02-11-017 et al., explaining the reasons for the large number of delayed and estimated bills over the past five years and a plan for reducing the number of these bills.

¹ PG&E's AL 2550-G/2534-E requesting authority to implement a late payment fee was filed on July 20, 2004.

² Resolution G-3372, Finding of Fact 3, p. 24.