CONTACT: Dianne Dienstein August 1, 1997 CPUC - 92
415-703-2423 (R.94-04-031/I.94-04-032)

CPUC APPROVES SIERRA PACIFIC CUSTOMER EDUCATION PROGRAM

ABOUT ELECTRIC INDUSTRY CHANGE

The California Public Utilities Commission (CPUC) today approved Sierra Pacific's plan for educating its customers about changes in California's electric industry and the kinds of choices they will have in January of 1998. All CPUC-regulated electric utilities will carry out a comprehensive consumer education program beginning September 1 and continuing until May 1998. The goal is to make sure utility customers statewide receive accurate, clear, and enough unbiased information to help them make appropriate choices about their electric service.

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, and San Diego Gas & Electric will carry out a joint, coordinated program under Commission oversight. Sierra Pacific and PacificCorp sought, and today received, Commission approval to carry out programs tailored to their customers and services.

Sierra Pacific sought Commission approval to develop its own customer education program because it differs from other CPUC-regulated electric utilities in several respects. Only 10 percent of Sierra Pacific's customers are in California, the rest are in Nevada. Its 42,000 California customers are primarily in the Lake Tahoe basin. Sierra Pacific does not own any significant generation facilities in California, and its California transmission facilities are 120 kV or below. During normal operations it serves customers entirely from its Nevada facilities and thus has not placed their operation with California's Independent System Operator. It is not planning to bid its generation into the Power Exchange.

Sierra Pacific's rates have been lower than those of the other major utilities and its California customers received a 5.6 percent rate reduction on June 1, 1996, so Sierra Pacific does not intend to implement the 10 percent rate reduction the major utilities will. Thus its customers will experience different procedures and requirements than customers of other utilities.

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CPUC APPROVES SIERRA PACIFIC CUSTOMER EDUCATION PLAN 2

Because its circumstances are so different from other utilities, and since Sierra Pacific customers live in small rural communities and need more direct communications targeted to those areas, the Commission agreed that a separate education program tailored to its customers was appropriate. However, Sierra Pacific must refrain from addressing in that program the issue of whether the 10 percent rate reduction for residential and small commercial customers required by AB 1890 applies to Sierra Pacific customers (as it does to those of the three major utilities) until the Commission decides the matter in a future decision.

Sierra Pacific intends to educate customers by:

• bill inserts to describe changes in the electric industry.
• visits to media to provide information to reporters about customer choices of electricity suppliers beginning in January 1998.
• participation in local events that focus on residential customers.
• town hall meetings to discuss how competition will affect customers.
• paid advertisements, and
• mailing information brochures to customers.

The program is expected to cost $80,000, $30,600 of which has been previously approved by the Commission in Sierra Pacific's last general rate case to fund residential and commercial energy education programs. The remaining funds will be from internal sources. Sierra Pacific will track costs related to the customer education program and if they exceed this estimate, seek Commission approval to recover them in rates after the year 2000.

Some of the key messages the Sierra Pacific education program will focus on include: assuring customers that although they will have choices, they do not have to do anything differently than they currently do; assuring customers that safe and reliable service will continue no matter who they purchase electricity from; and advising customers where to get additional information, how they can switch to a new supplier; and that safeguards are available if they want to report marketer abuse.

Sierra Pacific must have its customer education materials reviewed and approved by CPUC Energy staff to ensure they are accurate and unbiased, that is, that they do not favor Sierra Pacific at the expense of competing electricity suppliers. In addition, it must submit to the Commission a report each month until July 1998, detailing its education activities and expenses for the previous month, as well as the next month's anticipated activities.

Sierra Pacific may also develop marketing materials specifically to promote itself, and those materials will not be subject to review, but the costs for them will be borne by shareholders, not ratepayers.