CONTACT: Dianne Dienstein August 1, 1997 CPUC - 94
415-703-2423 (R.94-04-031/I.94-04-032)

CPUC APPROVES UTILITY PLANS FOR CUSTOMER EDUCATION ABOUT

ELECTRIC INDUSTRY CHANGE AND CONSUMER CHOICE

The California Public Utilities Commission (CPUC) today approved the plan major California utilities jointly will use to educate their customers about changes in California's electric industry, and the kinds of choices customers will have beginning in January 1998. The more consumers participating in the competitive electricity market, the greater the likelihood of price and service benefits for all consumers. The Commission views education as essential for customers to be able to make informed choices for change where it will benefit them.

Public Utilities Code Section 392 requires "that electricity consumers be provided with sufficient and reliable information to be able to compare and select among products and services provided in the electricity market, and [that] consumers be provided with mechanisms to protect themselves from marketing practices that are unfair or abusive."

Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, and Southern California Water Company (which provides electric service to Big Bear Lake in San Bernardino County) jointly will carry out the program and coordinate with the Low Income Governing Board, CPUC, and California Energy Commission education efforts. PacifiCorp and Sierra Pacific, due to circumstances different than those of the other utilities, sought, and today received, Commission approval to carry out similar education programs tailored to their customers and services.

The education effort will begin immediately and continue until May 1998 under careful Commission oversight, including review and approval of the messages fundamental to the program as well as all other aspects of the program. The goal is

- more -

CPUC APPROVES UTILITY PLANS FOR CUSTOMER EDUCATION 2

to make sure utility customers statewide receive accurate, clear, and enough unbiased information to help them understand how California's electric industry is changing, and to make appropriate choices about their electric service. The effort will target primarily residential, small commercial, and special needs customers - including low-income, rural, multilingual, and physically challenged customers - as well as opinion leaders. It may be particularly important for small businesses, including restaurants, grocery stores, laundromats and dry cleaners, which tend to use more electricity to become aware of options in the competitive electricity market so they can gain better control over their electricity expenses.

Large commercial and industrial electric customers are not a priority for this education effort because these types of customers generally have more resources and knowledge about electricity services, and they will receive information from the mass media portion of the program.

The education program is budgeted at $89 million, and the cost will be recovered through rates (electric rates are frozen at June 1996 levels and residential and small commercial electric rates will drop 10 percent January 1, 1998). As the program is implemented, it will be monitored for effectiveness and adjusted as necessary. The program will be evaluated to make sure that by May 1998, at least 60 percent of residential, small business, and special needs customers and opinion leaders can recall information about electric industry change and choices available to them. The utilities responsible for the education effort are responsible for meeting and/or exceeding this objective. For every percentage point below 60 which is not achieved, three percent of the costs of the education program cannot be recovered in rates.

Californians can expect to see information materials sent with their utility bills, TV and radio public service announcements, newspaper articles, participate in community education meetings, and receive information in the mail about the changes occurring in California's electric industry and new choices of providers and services available to them. This information will be disseminated in languages other than English as well as in English. An Electric Education Call Center with a toll-free number will be established to field consumer inquiries and provide additional information. - more -

CPUC APPROVES UTILITY PLANS FOR CUSTOMER EDUCATION 3

Community-based organizations with funding from the Electric Education Trust will play an important part in the education program reaching low-income customers, those who speak languages other than English, physically-challenged consumers, rural communities, small businesses and local government - an estimated 34 million people. The Commission must approve the Trust's community-based organization education outreach plan before any expenditures are made to carry it out.

Utilities and new energy service providers already have begun advertising and consumers will see more of this company-specific advertising done in an effort to keep or attract their business. This is not part of the statewide education program and is paid for by the company, not by ratepayers.

Although municipal utilities are not regulated by the CPUC, and are not required to participate in the competitive electric market, some may choose to do so in the future. In crafting Assembly Bill 1890 (Stats. 1996, ch. 854), the Legislature expected that some municipalities and districts may eventually elect to be part of the competitive market. It is possible that given the broad outreach of the utility education program and use of mass media, information will spill over into areas served by municipal utilities, however, care will be taken not to mislead municipal customers into believing that they may choose a supplier other than their municipal utility.

The Commission will complement and coordinate with the education effort by continuing to publicize its decisions describing how the new market will operate, updating its Website (http://www.cpuc.ca.gov) to reflect new information, making a list of energy service suppliers registered with the Commission available to the public on the website and through a toll-free number, doing outreach to communities around the state, and using a variety of other information/education techniques.

Throughout the remainder of this year, the Commission will make more decisions specifying how California's competitive electric services market will work. The best way to follow these developments is to access the CPUC Internet website at http://www.cpuc.ca.gov and check these categories: Electric Restructuring, News Releases, Commission Meeting Agenda, Daily Calendar, and Energy Division.