California utility firms evade regulation on advertising expenses and mismanagement of finances
California lawmakers rejected a proposal to enhance oversight of utility companies‘ spending in the state. Consumer groups highlighted loopholes allowing companies to misuse customer funds for advertising and lobbying. The legislation aimed to address these issues by closing loopholes and imposing fines on offenders. California legislators dismissed a plan to improve monitoring of utility companies’ expenditures in the state. Consumer advocates flagged loopholes enabling companies to misappropriate customer funds for ads and lobbying. The law targeted closing these gaps and penalizing wrongdoers.
California lawmakers struck down a proposal on Monday that would have further regulated how utility companies spend money in the state.
According to consumer groups, utility companies are exploiting loopholes in rules surrounding illicit spending on advertising and lobbying with customer money. The new legislation would have worked toward closing those loopholes and levying fines on violators.
“We’ve seen too many examples of the blatant misuse of ratepayer funds across the state,” said Democratic state Sen. Dave Min, who authored the bill that failed to pass on Monday. “I know that consumers are outraged by this.”
Utility companies such as Pacific Gas & Electric Company fiercely opposed the bill because it would “take away the power of state regulators to examine utility companies’ costs and decide whether it is ‘just or reasonable’ for customers to pay for them.”
A PG&E lobbyist told Fox News, “It’s appropriate for customers to pay for the company’s membership fees that go to various industry associations because they benefit customers.”
“There’s a lot of benefits to customers,” the lobbyist said.
A rising cost of electricity prompted the bill as the work to maintain and upgrade power equipment has proven expensive amid wildfires.
Matt Vespa, senior attorney at the environmental advocacy group Earthjustice, said Monday’s vote was “incredibly disappointing.” He said the current rules for utilities “incentivizes them to see what they can get away with.”
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Consumer groups said PG&E has spent up to $6 million on ads featuring a plan to bury power lines to reduce wildfire risk, though it may raise consumers’ bills. Consumer groups decried the moves as an “attempt at brand rehabilitation” in the guise of legal safety ad spending.
While California has the most expensive monthly water bill of any state at $77, it does not rank within the top five most expensive states for utilities. Alaska is the most expensive state for utilities.
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