This chapter addresses the consumer education issues the DAWG parties have discussed both before and after the August 30 Report. Various issues addressed in the August 30 Report are included in this chapter, along with additional material on development of a Consumer Education Plan.

The DAWG members envision three primary consumer education activities taking place in 1997 and beyond, to enable customers to

ï understand the benefits and pitfalls of direct access,

ï exercise meaningful choices in the new electricity market, and

ï recognize and seek remedy for the market abuses that may occur.

[1] Consumer Education Plan. AB 1890 has revised Public Utilities Code Section 392(d) so as to charge California's electrical corporations under CPUC regulation to devise and implement a Consumer Education Plan (CEP). Because California's major electric utilities are at present the primary electric corporations, as defined under P.U. Code Section 218, they should be charged with the responsibility to lead the development and implementation of that CEP. Once developed, the electric utilities will need to submit the CEP to the Commission for approval. [The Commission should note, in addition, that the category "electrical corporations" to which Sec. 392(d) applies is broader in scope than the major IOUs, and hence the Commission will need to address how to coordinate the activities of all such entities with regard to the CEP.]

[2] Oversight, Monitoring and Consumer Access to Market Information. The Commission is obligated to develop and perform a unique role in providing oversight, monitoring, and consumer access to information about providers and service offerings. Some believe the CPUC should also act affirmatively to foster access to competitive services in communities that might not otherwise be fully served in the new market environment. The monitoring and oversight aspects, which relate to consumer protection more than education, are covered more fully in Section 4.___ of this report. Market information and efforts to assist under-served communities are discussed below.

[3] Consumer Education Trust. In accordance with restructuring decision D. 95-12-063, we anticipate the formation of a Consumer Education Trust fund to, among other activities, enable community-based organizations to participate in consumer education programs.

Following an overview of the objectives of consumer education, each of these activities is described in the sections which follow.

5.1 Educational Needs and Objectives

5.1.1 Consumer Needs

Most parties agree that consumer education is a key factor in achieving meaningful consumer choice. AB 1890 has established that electricity consumers should be provided with sufficient and reliable information to compare and select among products and services provided in the electricity market, and with mechanisms to protect themselves from unfair or abusive marketing practices. Meaningful choice is the potential to achieve improvements in value received from expenditures made, by permitting individual consumers to select from market options with quantity or quality differences. As explained in Chapter 2, customers have the right to know, which is generally agreed to mean that customers should both have access to information and the means to understand how to use available information to make intelligent choices.

With the new reliance upon the competitive market to provide basic electric services for small consumers, the Commissions new objectives can be summarized as:

1. Promote a competitive marketplace with multiple buyers and sellers.

2. Arm all consumers with the information necessary to make informed choices through multilingual and varied media educational efforts, particularly targeted toward the most vulnerable.

3. Direct educational programs toward informing communities about potential benefits and abuses under deregulation, including how to get the best package of services, how to safeguard themselves as consumers against abusive practices, and what to do in case of fraudulent practices affecting them.

These three elements are essential to a societally efficient competitive market. This underlying premise compels the CPUC to take actions to inform consumers adequately about their choices of service and service providers, a goal that can be accomplished with four strategies:

[1] Make available price and quality comparisons. DAWG Parties disagree fundamentally on which prices and qualities of service should be provided by the Commission. Some argue for the Commission providing such data for all providers, both unregulated retailers and regulated UDCs, whereas others argue that the Commission should provide only UDC price and quality data as a benchmark against which consumers may compare other service offerings.

[2] Monitor customer education conducted by private participants and administer an education trust fund for the electric industry.

[3] Work to help mitigate educational barriers to meaningful customer choice, especially in traditionally under-served communities.

[4] Monitor customer complaints and alleged abuses by providers, both in terms of how well educational efforts are enabling customers to report problems and complaints as well as the level of potential fraud or abuse by new providers. Initiate investigations of providers where there appear to be patterns of abusive practices.

5.1.2 CPUC Responsibility to Consumers

The Commission must accept significant customer education responsibilities, guided by the principles of Chapter 2 ó to make competition work, to make it work in accord with state policies to preserve equity principles, and to prevent abuse and foster competition in all communities, especially those that are chronically under-served. Regulators will need to ensure that consumers are provided with the tools to participate in a competitive market.

Most agree that the CPUC must maintain an active role in a deregulated electric power industry similar to its role in telecommunications by providing a framework in which competitive players operate in a structured market. Since many elements of restructuring span beyond direct access, it is essential that the IOU/UDC play a major role in implementing what we have labeled as the Consumer Education Plan (CEP). The initial wave of consumer education will need to heavily involve electrical corporation resources and information delivery systems, with CPUC oversight as dictated by AB 1890.

Even under the traditional regulatory paradigm, certain residential customer groups have been under-served relative to other customers. In telecommunications, rural areas, low-income and minority groups, especially those with language diversity, were not as well served as other customer groups. In a competitive markets, under-served communities will increase as private markets function to stratify social and economic classes. Residential consumers will be cherry-picked because the underlying objective of the competitive market is to discriminate between those receiving cross-subsidies and those funding cross-subsidies. Unfortunately, the social objective of non-discriminatory electric services (c.f. Public Utilities Code 451, et. seq., 453 et. seq.) is undermined by this competitive reality.

Some believe it is incumbent upon the Commission to pay special attention to potentially under-served communities (e.g., rural areas, minority groups, seniors, renters, low-income, inner city and areas served by antiquated equipment). In a competitive electric market, market outcomes for some under-served communities may be determined by technical factors, such as distribution constraints or unusual climatic factors, that may make these communities less attractive to aggregators. According to this viewpoint, the Commission should try to prevent or correct any discrimination, whether intentional or inadvertent, that is engendered by the competitive market.

Others believe the Commission should recognize that the communities referred to may be avoided by retailers due to legitimate technical and economic factors. According to this viewpoint, the Commission should recognize that such selection by retailers will take place as a normal result of competition, and should not attempt to control the outcome of legitimate market behavior. Of course, if and when illegal discrimination occurs the Commission should take appropriate action to eliminate it.

5.1.3 The Need For Flexibility

Many aspects of direct access remain uncertain, making it difficult to specify fully the design elements of specific education efforts at this time. For example, the DAWG members are uncertain as to the rapidity of the direct access phase-in, or the selection mechanism that will be used to determine eligibility for direct access in 1998 if it is limited. Also, it is not clear how interested smaller customers will be in direct access. Finally, we expect that as-yet-undefined load profiling and aggregation rules will significantly influence the eventual penetration of direct access into the small customer market segment.

As a result of this uncertainty, the CPUC must put into place educational efforts that are flexible, and can be modified on short notice as other aspects of direct access fall into place during 1997. It would not be appropriate, for instance, to design a program with significant mass advertising directed towards small customers, only to find that there are virtually no marketing firms interested in providing direct access service to small customers. Such a result would create consumer skepticism, and could harm the long-term development of a competitive generation market. However, general education for consumers about the changes in utility distribution and retail functions is required, regardless of how the residential retail market develops.

Irrespective of the size of the small customer market or the level of customer interest, a certain basic amount of information needs to be conveyed to small customers regarding the possible benefits and the potential for marketing abuses or fraudulent practices. Customers need to know how to recognize the positive value from direct access, and how to seek redress should they be victimized by unfair marketing practices. Since we cannot fully anticipate all the creative opportunities that may arise, for the great marketers and the unscrupulous alike, flexibility is needed in this area as well.

5.1.4 The Virtual Direct Access Option

While we cannot yet predict the interest of competitive marketers in bringing Direct Access to small customers, Decision D. 95-12-063 has ordered that all customers should be able to choose Virtual Direct Access as soon as they have interval meters. The Virtual Direct Access Option allows the customer to remain a full-service customer of the UDC, but to be charged for electric service according to the hourly spot prices determined by the Power Exchange (PX).

As the Decision correctly argues, hourly price signals offer the possibility of increasing the overall efficiency of energy consumption by bringing the prices facing all customers into line with costs that vary by time of day. For most small customers, however, such hourly price signals will be a completely new experience. And because Virtual Direct Access is the only new option that we know for certain will be available to all customers, it is essential that the Consumer Education effort ensure widespread understanding of how this option will work and the criteria customers should assess in deciding whether to choose it.

5.2 Consumer Education Plan

5.2.1 Introduction

Although the August 30 DAWG Report set forth a number of different options for choosing a lead entity to direct education efforts, the Legislature decided in AB 1890 that the "electrical corporations" will be responsible for developing and implementing a Consumer Education Plan (CEP) during 1997. Representatives of the three major investor-owned utilities have agreed to take on this responsibility, and to work closely with stakeholder groups to seek consensus on their efforts.

In broad design, the DAWG envisions that the utilities would jointly select an outside consultant to assist in fashioning a CEP, and perhaps in developing and actually delivering key messages to consumers. We see this as both efficient and effective, by avoiding duplicative development of possibly inconsistent advertising messages in different parts of California. Use of an outside consultant creates greater opportunity for CPUC and stakeholder involvement in the process of developing the CEP. For example, we expect the utilities would involve stakeholders in developing the scope of work for the consultant prior to issuing a request for proposals.

We encourage the CPUC to support participation by municipal utilities in developing the CEP. To the extent that mass media advertising is used, it is not possible to target such advertising to selectively avoid customers of nearby municipal utilities. Close coordination is necessary to avoid potential customer confusion.

When the need for a utility-led process for developing a CEP became apparent, the DAWG Consumer Protection and Education subgroup created a "Consumer Education Plan Group" (CEP Group), composed of communication experts from the three utilities. This group has held several meetings to initiate the process of developing the CEP. The next four sections reflect primarily the findings of this group, supplemented with issues discussed in DAWG meetings.

5.2.2 Goals of the Consumer Education Plan

There are four simple and straightforward goals that must be achieved in order to meet overall consumer needs:

1. Minimize consumer confusion over the changes in electric utility business structure;

2. Educate consumers about the benefits and pitfalls that may be associated with direct access opportunities;

3. Increase consumer understanding of potential market abuses and opportunities for consumer recourse; and

4. Raise awareness of what consumer choice means in the emerging marketplace.

It is important that educational efforts lend themselves to performance measurement, where practicable, so that the success of consumer education activities can be assessed.

The CEP should be developed consistent with the following principles.

First, traditional and non-traditional forms of communication media should be used to ensure maximum consumer reach. Because of the need to reach as many consumers as possible, the CEP should use a diverse range of approaches to seek out consumers who might not pay attention to standard communication media such as newspaper or television advertising.

Second, the program needs to be constructed from the start as a multi-lingual campaign. In other industries, there is concern that non-English-speaking market segments are often targeted for abusive marketing practices or miss opportunities because they are unaware of them, and such is likely in the emerging electricity market as well.

Third, consumer information needs should drive the messages and their presentation. The CEP must be designed in a flexible, iterative manner, with sufficient market research incorporated in the design to tailor the messages to respond to measured consumer needs.

Finally, participation by representatives of various target consumer segments is crucial. Involvement in the CEP of other stakeholders, including retailers targeting smaller customers, while not a substitute for measurement of consumer needs, is nevertheless very important to ensuring that needs are not overlooked and that messages are crafted in a sensitive and effective manner.

5.2.3 Responsibilities of the CEP Group

The three investor owned utilities are willing to take the lead in developing and implementing the CEP. One argument for this is that if implementation of the CEP is assigned to a party that is not well known to consumers, further education would be needed to introduce this new party to consumers, which will further complicate the education process.

The CEP Group envisions the role of the consultant to be one of facilitating the development of the CEP by working with representatives of the three utilities, the CPUC, stakeholder groups representing low-income, elderly, non- and limited-English speaking and other consumer groups, and retailers targeting small customers.

The consultant will need to have experience developing broad-scale consumer education campaigns targeted at diverse audiences. Some of this experience should be with populations similar to California in their ethnic and social attributes. Additionally, the consultant should have some implementation experience, in order to provide the CEP Group with a realistic assessment of what does and does not work. In order to ensure effective control of expenditures, the contract could be structured in phases. For instance, Phase I would be a contract for working on development of the CEP and the specific messages to be conveyed to consumers. If there is a role for the consultant in implementing the CEP, this would be addressed in a separate Phase II contract.

Some parties believe the CPUC should designate a neutral entity ó perhaps itself ó to which customers may direct questions and from which they may receive information. Although most consumers will naturally turn to their current utilities for information, these parties believe that a statewide, public source of information is needed to function in parallel with the implementation of the CEP. Whether the CPUC decides to perform this role itself or to designate another entity, the CEP would need to address how to inform customers about this entity. The CPUC's role in delivering education and customer information is discussed further in Section 5.3.

It would be advantageous to move forward quickly to create a Consumer Education Trust, and to begin the process of engaging Community Based Organizations (CBO's) in the educational process at the outset. This will allow CBO efforts to proceed in a coordinated manner alongside implementation of the CEP. The Consumer Education Trust is discussed in Section 5.4.

Parties vigorously debated the role of the consultant in implementing the CEP through paid communications (e.g., print, radio and television advertising) crafted to reflect a uniform statewide message. Some parties believe that using the consultant in this manner assures an arms-length process that may allay concerns marketers would have about the extent of direct utility involvement in education efforts. To the extent that local community differences are minor, there may be economies gained by using a uniform advertising approach. Others believe that the utilities should be free to use their existing advertising agencies, to target the specific needs within their service territories (consistent with the goals and approaches in the CEP, of course). Utilities argue that this latter approach can be implemented faster, and with greater confidence of success. They also believe this latter approach will mitigate consumer confusion regarding the perceived sponsor of the educational materials. This could be important in terms of gaining consumer trust regarding the advertising message. Resolution of this issue should be attempted by the CEP Group in further meetings, and with the assistance of the consultant.

Regardless of the role of the consultant, the level of control by outside parties, and degree to which paid communications are used, existing utility communications should be a key part of educational efforts. Newsletters and other forms of bill inserts are a relatively inexpensive and targeted vehicle for small customer education that should not be overlooked.

The utilities, facilitated by the consultant, are willing to make billing envelope space available if so ordered by the Commission to meet regulatory requirements, subject to competing requirements for using this space for legally-mandated inserts, and will produce common materials to the extent appropriate. Some parties go further and argue that these bill envelopes, paid for by all ratepayers but legally owned by the utilities, have additional room into which lists of qualified, certified aggregators may be inserted along with customer information about how to evaluate their service offerings. This vehicle helps reduce the significant transactions costs facing any service provider seeking to enter the mass market. Notably, this list can be distributed as an information insert in a UDC's billing packet, much as rate increase notices are distributed today. The incremental costs of the insert could be defrayed by a contribution from those aggregators who are listed in the notice. Other methods of cost reimbursement are addressed in Section 5.2.6.

Other parties caution the Commission to recognize what legal limitations exist for utilities to make bill envelope space accessible to other entities when deciding what to require as bill inserts. Going beyond general education and actually requiring names of competing retailers and retail options may be inappropriate.

5.2.4 Key Messages

Refining the key messages to be presented to consumers, through research and stakeholder involvement, will be a critical part of the effort to develop the CEP. As a starting place, we list some of the key messages that have been identified by the CEP Group as themes to be targeted to all audiences:

Change is coming.

Consumers will have choice.

Consumers may see benefits.

Consumers do not have to do anything if they wish. to continue "business as usual" service.

Consumers need to be careful about potential marketing abuses.

There is a place to go for further reliable, neutral information.

Some aspects of the changes are not yet known, so stay tuned for further information.

The experience of the Caller ID Notification Plan, which is described further in Section 5.2.7 below, suggests a somewhat different set of potential key messages:

Local utilities will offer new service options, and companies other than the local utility will be selling electricity.

Customers will have the right to choose these other services or stay with the local UDC.

In making a choice, the customer must understand prices, risks, and their own usage patterns.

Utilities will provide customers with personalized energy use profiles if they are reimbursed for their costs.

The CPUC and/or specified others will provide customers with energy shopping information.

There are a number of assumptions about consumers and about the pace of restructuring which underlie this choice of key messages. For instance, we are assuming a high degree of consumer skepticism based on experience in telecommunications restructuring, so the availability of default service from the existing utility provides a familiar backdrop for consumers who wish to evaluate competitive alternatives. We are also assuming that advertising and other educational efforts will need to begin before key elements of restructuring have been firmly established, so the concept of restructuring as a dynamic, evolving process needs to be clearly conveyed, or else consumers will draw negative conclusions when definitive answers to their questions are not available.

5.2.5 The Consensus-Based Process

The DAWG parties share a general concern about the brevity of time remaining to develop and implement an effective CEP to ensure the smooth and equitable opening of direct access on 1/1/98. This legitimate concern inevitably translates into an argument against trying to achieve broad stakeholder consensus about the strategies and implementation details of a CEP. At the same time, to be effective the CEP must have stakeholder involvement and support, for the variety of reasons discussed earlier in this chapter. There is no question that development and implementation of the CEP must transpire in an environment that allows effective involvement by a variety of stakeholder interests, but this requirement may be implemented in a variety of ways. The Commission should therefore authorize a process that will allow broad participation yet cannot be delayed by an inability to make decisions.

Some of the DAWG parties assert that the utilities responsible for managing the CEP should organize a consensus-based process that will provide ongoing input about CEP development, consumer education strategies, and specific consumer materials such as bill inserts. Such a consensus-based process need not function as a review board that would have veto powers over CEP development. Timely development of educational materials is critical, so the CEP Group must have the authority to move forward when necessary, even where there is a lack of stakeholder consensus. At the same time, the utilities may be reluctant to move forward definitively where there is serious dissent and the potential for parties to challenge their efforts at a later date. These parties recommend therefore that the CPUC appoint a "referee," either from within its own staff or from another state agency, to serve as an independent, neutral party that utilities and other stakeholders can rely upon to arbitrate disputes.

5.2.6 Funding

Utilities should be permitted to recover the incremental costs associated with CEP development and implementation. DAWG members recognize that providing such funding is a necessary precondition to obtaining utility involvement in the CEP. Such funding should be consistent with the direct access implementation funding described in Section 376 of recently AB 1890, and should not result in any rate increase during the rate freeze period through December 31, 2001.

The costs of developing and implementing the CEP should be allocated fairly across the utilities. One way to do this, one party suggests, is to assign to each utility a share of the total cost that is the same as that utility's share of total 1996 kWh sales for the three IOUs.

Although funding recovery should be conditioned on the reasonableness of utility expenditures, the DAWG members do not anticipate the need for an explicit reasonableness review. As a result of the consensus-based process, and reliance on the CPUC-appointed referee, expenditures should be deemed reasonable, absent a prima facie demonstration to the contrary. (Good faith reliance on the judgments of the CPUC referee ó mentioned in the previous section ó should be per se reasonable). Some parties believe that utilities should utilize a portion of the current consumer education funding that is already established in rates for the CEP program.

The CEP Group recognizes the interest of many parties in developing ballpark estimates of likely CEP funding requirements, but it is not able to do so at this time. One party suggests that, to allow the education effort to move forward, the CPUC should authorize an initial expenditure of up to $10 million for 1997 statewide activities, excluding Consumer Education Trust funding. This amount may be reduced if the CPUC takes a strong role in establishing itself as the neutral entity to which customers can turn for information. In any event, the work of the CEP Group and its consultant will be required to establish a realistic, comprehensive budget for the program.

5.2.7 Experience with the Caller Notification Education Plan

The Commission has demonstrated the efficacy and effectiveness of community-based education in its implementation of the Caller Notification Education Plan (CNEP). Recognizing that the introduction of CallerID would present new and important impacts upon telephone customers due to the automatic release of sensitive personal information (i.e., customers' unlisted phone numbers) to anyone called, the Commission required that Pacific Bell and other phone providers conduct a "bottom-up" education and "opt-out" plan as a precondition for the commencement of CallerID service. Because Pacific Bell was determined to be the primary financial beneficiary once this service was offered to customers, the Commission required Pacific Bell to pay the full $32 million education program cost for the CNEP.

Although the purpose and need for education are very different between CallerID and electric industry restructuring, some parties believe that lessons learned from the Pacific Bell program may be useful when considering policies for electric industry restructuring. The efficacy of that approach to customer education is discussed in depth in "Evaluation of the October 11 Pacific Bell CNEP on CPN Delivery," by Professor Brenda Dervin of Ohio State University. That report, commissioned by the CACD and delivered on November 21, 1995, establishes a number of important principles for educating customers about changes in utility service.

Some features recommended by the Dervin report and adopted by the Commission include:

[1] Independently Crafted Messages. Dervin stressed the need for involving community representatives in producing the campaign messages. For CNEP, the Commission approved the hiring of a nationally recognized media consultant to develop themes and mass advertising and sought the input of intervenors to refine the proposed themes.

[2] Use of Community Based Organizations (CBOs). Dervin emphasized the use of high involvement/high interaction outlets and recommended that at least 50 percent of the campaign be implemented out in the communities. Recognizing the educational advantages offered by the state's network of non-profit CBOs, the CPUC required that these CBOs be hired to conduct customer education.

[3] Early and Concerted Efforts. A concerted education plan should commence six months prior to the beginning of the new regulatory scheme and be continued through the transition. The campaign must be iterative and sustained, according to Dervin. Accordingly, the CNEP began educating customers almost 6 months prior to the introduction of Caller ID service in California. The $32 million plan elicited so many customer responses that Pacific Bell could not accommodate the crush of customers seeking blocking protection, and implementation was delayed until customer responses could be completed. The plan is to continue for one year after the introduction of the service.

Drawing upon these lessons from telecommunications, community-based programs should make the campaign relevant to customers. Electric restructuring is going to require a new awareness by customers of matters that had been heretofore largely handled by the monopoly utility. It will be essential that customers are educated, in simple terms, as to why they should care. The message must be interactive and accessible to all customer groups, including multi-lingual and multi-cultural communities. In addition, consumer education should be designed to prevent foreseeable abuses. Telecommunications deregulation foretells some of the marketing and other abuses that may also come with electric deregulation in California, as discussed in Chapter 3.

Not only must consumer education begin well in advance to inform customers that restructuring is going to happen and what it will mean to them, but they must also be educated about how to protect themselves from abuses by the unscrupulous. Language minorities, the poor, immigrants and limited-English-speaking will be most susceptible to targeting by potential fly-by-nights and quick-buck artists abusing the Commissionís certification and redress process. In all major slamming and marketing abuse cases prosecuted by the CPUC to date in telecommunications the unscrupulous practices have been focused primarily on limited-English-speaking and minority groups. Many of these victims have been charged rates two or three times higher than those of their previous carrier, and have been billed for calls they never made. These targeted consumer groups must be educated both ahead of time and as restructuring progresses about how to evaluate and/or make informed choices among competing energy providers, what credit information may be sought, where to report suspected abuses, what to do if they are over-billed or slammed, where to go for redress, and what their rights are in terms of a provider of last resort. All information must be multilingual and culturally appropriate, and provision must be made for illiterate customers or those, such as the Hmong, without a written language. In evidence adduced recently before the Commission in the CTS slamming investigation (I.96-02-043), witnesses testified that minority and limited-English-speaking populations are targeted because of their propensity not to complain to authorities and not to know how to exercise their rights.

5.3 The CPUC's Consumer Advocate Role

5.3.1 Access by Consumers to Their Own Usage Records

In order to comparison shop effectively, customers will need to be educated about their own energy consumption patterns and history of usage. It is unreasonable to expect that customers have saved their bills over the previous three years in order to secure this information. The IOUs, however, have collected historical data about their customers that can be used to help educate those customers about their own energy usage history, and its importance to their opportunities. Two approaches were identified by parties.

[1] IOUs Provide Customized Usage Profiles. In order to facilitate customer evaluation of options, the IOUs could be directed to provide, upon request, an energy usage profile for an individual customer. Costs to provide this information should either be reimbursed by the customers or through cost recovery mechanisms that encourage IOUs to perform this function proactively. Profiles could include a chart and breakdown of monthly data for energy consumption and price paid for energy over the previous 12-24 months. In order to participate in a meaningful way in consumer choice opportunities, the electric customer needs energy usage history, data from comparable periods of the current and at least one previous year, adjustment for weather fluctuations, adjustment for price changes, comparison to other customers' energy usage and breakdown of expenses for major appliances. (See W. Kempton, Improving Residential Customer Service Through Better Utility Bills, ESource SM-95-1, August 1995). The first energy profile could be offered at no cost to customers, paid for through other funding mechanisms. Modest direct customer charges may be applied to subsequent profile requests. This profile will be the basis upon which customers can gauge their historical energy consumption patterns, better assess their energy needs and gain a sense of the cost of that electricity.

[2] IOUs Provide Raw Data. IOUs could be directed to provide raw energy consumption and bill data for each billing interval in their active computer databases for a processing fee. Searching back into archived records would be an added cost activity. Analysis to adjust raw data for price changes, weather, or other anomalies would be something performed by the customer, a potential energy service provider, or a third-party firm providing an analytic service.

5.3.2 Price and Quality Comparisons

If a consumer is unable to comparison shop for electricity services, then the market will fail. In order to shop, a customer must be able to determine value. This point is affirmed by the legislature in AB 1890, Sec. 392(b). In order to establish value, the consumer must be able to compare price and quality of competing services. Some believe that competitive markets don't always succeed in providing such information. Long-distance and local-long distance telephone services and the auto insurance industry are examples where industry has failed to properly apprise customers of essential information. In response to this problem, the state's Department of Insurance has a program to assess and publicize comparative rates and customer service records for auto insurers. This agency is also statutorily charged with creating a hot-line service for price comparisons for customers.

Some parties believe that explicit education programs must be developed by the CPUC that would supplement the information provided by the private market. These efforts could include:

ï Monthly listing of licensed energy providers;

ï Bi-annual listing of price comparisons among energy providers;

ï Bi-annual listing of consumer complaint information;

ï Annually-revised glossary of energy service terms and description of services;

ï Telephonically-accessed listing of service providers whose license has been revoked, suspended or limited and an alert about unlicensed providers; and

ï Creation of representative service benchmarks for different types of customers upon which comparisons of service can be readily made.

Some parties believe this information should be made available to all customers at no cost. It can be distributed though CPUC offices, community-based organizations, other state agencies and by all licensed energy providers. Others emphasize the need for this information to be accessible by both English- and non-English-speaking customers.

Other parties believe that it is premature to assert a need for an aggressive and potentially costly shopping service such as the one described above. These parties suggest that either no program or a more market-oriented approach be considered, wherein this information would be provided by retailers or other third parties to those desiring and valuing it at market-based prices. If the Commission decided that market information must be provided, then UDCs or ESPs might also be used to provide this information, rather than a new organization that would have to be created, staffed and functioning in a short period of time.

5.3.2.1 ALTERNATIVE: CPUC dissemination of market information

The CPUC should collect and disseminate service provider price and service quality information. This alternative assumes use of information about all service providers. A variation could be that the CPUC would limit its efforts to providing information about UDC service offerings, which would give consumers a benchmark against which to compare other offerings. This limited effort would be much simpler than providing information about all service providers, since UDC pricing information would be on file at the CPUC and would not require additional surveys.

Alternative 5.3.2.1 PRO

The CPUC is in a position to provide this function since it is the agency responsible for receiving complaints and compiling complaint data, according to the mandate of AB 1890. Its function can be extended to gathering pricing information from service providers. The information so gathered and compiled can be made available to the public.

Alternative 5.3.2.1 CON

Gathering pricing data will involve considerable CPUC resources that could be better used in its other regulatory functions. Complaint data, alone, may be inadequate as an indicator of service quality. Use of an independent, outside firm, qualified to perform pricing and/or service assessment surveys, would be preferable to CPUC involvement. A problem, however, is that ESPs may be unwilling to release in advance such information as would reveal their marketing strategies and thus place them at a competitive disadvantage. Older price and quality information, which they might be more willing to release, would be less valuable to consumers and would therefore limit the effectiveness of this effort.

5.3.2.2 ALTERNATIVE: Education Trust provides market information

The RESET (Consumer Education Trust) should be required to include the function of price and service quality information gathering and dissemination as an out-sourced outreach mechanism to be duly funded.

This alternative would require the RESET to issue an RFP to select an independent monitoring or survey firm to gather pricing and service quality information on service providers. The information developed would be made public via channels determined appropriate and effective, such as a quarterly or semi-annual published report, available at libraries or on the Internet. The information would be provided on a regular basis as long as the RESET and a public need exist.

Alternative 5.3.2.2 PRO

This alternative draws upon the model supplied by publications such as Consumer Reports, which contains relevant and useful product price and quality information for consumers. It would utilize the market, rather than the government directly, to perform the task of gathering market information and advising the public of the results.

The CPUC's complaint data, alone, may be an inadequate indicator of service quality. The gathering of other information, such as customer satisfaction data, would give consumers a more complete picture of the market players. The development of this type of data is best left to survey experts, independent of the market itself. Importantly, the CPUC would conserve limited resources to enable it to perform other priority work.

Alternative 5.3.2.2 CON

The CPUC should have the primary responsibility for assuring that consumers are provided with adequate information to allow them to make informed choices. While involvement by RESET may be useful, it is very important that such involvement not dilute in any way the primary responsibility of the CPUC.

5.3.3 Monitoring Customer Education by Private and Non-Profits

Some believe that the CPUC should go beyond ensuring that price comparison information and evaluative services are provided, and that the CPUC will be obligated to monitor private consumer education by market competitors and non-profits to ensure accuracy of the information. Parties identified four activities that could be taken by the CPUC to improve the quality of consumer information in the market.

[1] Provide Materials. The Commission should provide copies of its education materials to CBOs and other state agencies for distribution to clients.

[2] Provide Training. As part of its public outreach and dispute resolution functions, the Commission could train individuals in CBOs and assorted social service agencies to handle electric service complaints. These designated individuals would then be familiar with the types of complaints and the remedies available to customers who have problems with the competitive services. Trained individuals could advise the consumer, help mediate a resolution or refer the customer to the CPUC and/or other appropriate entities for resolution of the complaint. This training effort could substantially increase the likelihood that consumers will get assistance. It would also serve as an early warning system for potential systemic problems in the market, and it could reduce the workload on the Commission's Consumer Services Division.

[3] Review Draft Materials. The CPUC could also serve in an advisory function for market participants. During the transition period, the CPUC should provide a service whereby it will review marketing materials voluntarily submitted by service providers to the CPUC. By undergoing an accuracy review by the CPUC, the market providers may be protected against possible private action for misleading or false advertising. The CPUC might in this way be able to proactively prevent potential customer confusion.

[4] Hold Providers Accountable. The CPUC must inform providers that they will be held responsible to the extent consistent with law for any fraudulent, deceptive or other unlawful marketing or billing acts performed by their agents and representatives, whether or not they attempt to insulate themselves by classifying such persons as independent agents.

5.3.4 Fostering Aggregation of Small Customers

Small customers may need to rely upon service by aggregators in order to participate in direct access. Absent aggregation, small customers' costs will be linked directly to the performance of the Power Exchange (PX). As demonstrated in insurance, banking and other complex services, aggregation of small customers can reduce transaction costs and increase market leverage. In newly established markets like electric and telecommunication services, it may be essential that such aggregation occur to give small consumers some opportunity to secure improved service and lower costs.

The CPUC is acutely aware of the problems faced by traditionally under-served communities. It has studied and is aware of low-income, senior, rural, ethnic minority, inner-city and other readily identifiable subgroups that have not been adequately served in telecommunications reforms. It is uniquely qualified to help identify these communities to aggregators by improving information and communication among potential customers. Some parties believe this task cannot be left exclusively to the private market because they assess other market results as inadequate. There are at least two alternative views about how far fostering aggregation should go.

[1] Educate Consumers. During the five-to-ten-year transition period, the CPUC should be active in helping promote aggregation by properly educating customers. While the Commission should not directly assist energy providers, it can serve as a coordinator for private companies to find customers. For example, it can direct the distribution of information to the state's customers about available aggregators in rural, inner city and other under-served communities. It can establish a hot-line where interested consumers can learn of the potential aggregators.

[2] Actively Facilitate Aggregation. Some parties believe that the CPUC can be even more active and work with the private market to aggressively promote customer aggregation. It can assist municipalities and other public agencies that seek to create legal aggregators of electric or phone services. It can list the aggregators' names and product information on the CPUC Web Site and make the information available at CPUC offices.

5.4 Restructured Electric Service Education Trust (RESET)

The Commission has set the stage for development and implementation of an Education Trust as an important element to facilitate the success of its program to restructure the electric industry. Before developing a framework for a consumer education trust for electric service, let us look at two other trusts with educational aims, namely the Telecommunications Education Trust (TET) and the Deaf Equipment Acquisition Fund (DEAF) Trust. Some parties advocate a structure similar to the TET fund, with independent administration and allocation of funds to community organizations and others who are familiar with community-specific needs and specific fraudulent activities in various communities, and who have the confidence of their communities.

Section 5.5 of this report provides an example charter for the Trust. It is not endorsed by DAWG, but is included for the purpose of eliciting comment. This charter takes the form of a legal document that embodies some of the approaches described in the remainder of this section.

5.4.1 Telecommunications Education Trust (TET)

On December 22, 1987, the Commission issued D.87-12-067 which ordered Pacific Bell (Pacific) to create a trust fund called the Telecommunications Education Trust (TET). The TET was one of the programs the Commission ordered Pacific to establish to make restitution to ratepayers for abusive marketing tactics employed by the telephone company in selling certain telephone services. TET's objective was to further educational efforts and increase ratepayer understanding of the telecommunications system. Pacificís funding for TET was set by the Commission at $16.5 million. The money was to be disbursed annually over a period of six years ($3 million per year for five years; the remainder in the sixth year) to various community and consumer oriented groups and other organizations to implement certain outreach and educational projects. TET funds were to be administered by a trustee; in this case, the trust department of a bank. A disbursement committee composed of DRA, Pacific, two consumer groups and the Public Advisor would meet annually to review applications for funds and decide which projects were to be funded.

5.4.2 The Deaf Equipment Acquisition Fund (DEAF) Trust

The second trust fund, the Deaf Equipment Acquisition Fund (DEAF) Trust, existed in various forms since the early 1980s when state legislation mandated a fund be established to provide special equipment and communication services to deaf, hearing impaired and disabled individuals. Funds were collected by placing a surcharge on intrastate telephone calls. In 1989, in response to complaints from various groups in the deaf and disabled communities, the Commission issued D.89-05-060 (May 30, 1989). This decision completely reorganized the administrative structure of the DEAF Trust.

Prior to this decision, under the jurisdiction of the Commission, Pacific administered the DEAF Trust and performed its day-to-day activities. The decision created one administrative committee and two subcommittees, and ordered the administrative committee to open and staff a DEAF Trust office to handle day-to-day operations. Each committee had representatives from the various constituent consumer groups, as well as personnel from the telephone utilities (including the communications services provider) and Commission staff. The 1996 Budget for the DEAF Trust was approximately $44 million.

5.4.3 Comparison of the TET and DEAF Trusts

The differences between the two trust funds are summarized below.

[1] The TET was established to benefit all users of telecommunications services; the DEAF Trust was established to benefit only certain segments of the community.

[2] The TET was funded as a result of a penalty levied on a utility by the Commission; the DEAF Trust was funded by a surcharge.

[3] The TET was a temporary trust; the DEAF Trust is a Federally-mandated permanent fund.

[4] The TET was established as a disbursement vehicle for restitution funds; the DEAF Trust is an activity subsidized by customers.

[5] Each TET Committee member had one vote; on the DEAF Trust subcommittees, certain parties were standing members only and were not permitted to vote.

5.4.4 Restructured Electric Service Education Trust (RESET)

The following three subsections provide an initial proposal for a RESET. It is not necessarily constrained by current CPUC authority, since changes in statute may be required to establish other facets of retail restructuring. This is not a consensus proposal. Although there are alternatives presented on certain elements, no other overall proposal was presented by the working group participants.

5.4.4.1 Scope

RESET is to be established to promote consumer education and understanding of forthcoming changes in the structure of the electric industry in California and to educate consumers about service options available to them in the newly competitive electric environment. Among other things, such efforts could include: mass media programs, educational forums and community outreach efforts, all paid for by giving trust funds to selected groups. All funds disbursed must be used strictly for education purposes, not for advocacy by any group. Special efforts should be made to target certain groups such as the elderly, low income and non-English speaking communities. Experience in the restructuring of the telecommunications industry indicates these groups are targeted by unscrupulous companies and subjected to various forms of marketing abuse such as slamming and redlining.

Timing is a major issue, with respect to both funding and instructional efforts. Consumers must be educated before the market is declared competitive, as well as during the transition and afterward. In order that direct access can be implemented, a major responsibility of the education trust will be to ensure that customers are able to make informed choices in the market. For this to happen, massive and general education efforts must begin at least six months prior to implementation of direct access, i.e., no later than July 1, 1997. Obviously, the trust must be established well ahead of that date. If legislation is required to create the trust, the Commission should make the appropriate overtures to the Legislature now to make it happen.

5.4.4.2 Funding

No detailed estimates have yet been made of the potential price tag that will be required to equip consumers to participate in a restructured industry. The recent Caller Notification Education Program (CNEP) carried out by Pacific Bell to educate its customers about Caller ID service cost approximately $32 million. That program was limited in its content and was a one-time-only effort. The effort for electric restructuring will need to be more extensive, and last several years at least. Therefore, one might suspect that expenditures for consumer education on electric restructuring might exceed those of CNEP. However, it is not likely that all education efforts will be conducted and funded via the trust. Therefore, funding of the trust could be less costly than CNEP.

Funding should come from those companies who have a vested interest in doing business in California in the newly deregulated energy market. A budget for outreach and education could be agreed upon, as well as a fair and reasonable method of assessing industry participants. In addition, an education fund of this nature could be fed by fines or penalties levied by the Commission on service providers who violate the Commission's rules. Finally, seed money for the trust could come from direct access transition funding similar to that proposed for utility-sponsored education activities.

Potential sources of funds for the education trust that have been discussed by the DAWG members include the following:

_ Utility funding, diverting funds already earmarked for marketing and education;

_ Utility funding, with expenses tracked via a memorandum account to be settled later;

_ Utility funding, recovered in distribution rates or as part of the Public Goods Charge;

_ Registration fees or a kWh-based fee charged to service providers;

_ Fines and penalties levied on market participants; or

_ Private funding from advertisements included in educational materials.

Three alternative short-term funding views are as follows:

[1] Divert authorized utility marketing/education funds. A short-term funding mechanism might be to divert general rate case funding for marketing and education programs, such as DSM programs, to the trust.

Alternative [1] PRO

Consumers should not be required to pay for a program to educate them when the matter of whether or not the industry was to be restructured was beyond their control. At the outset, existing IOUs would be adequately reimbursed through regulatory mechanisms before being required to provide funding. Using funds already allocated to marketing and education programs in past GRCs would reduce potential new outlays of funds for restructuring education. Such funding is already included in rates, so customers would pay, but they would not pay more. Whether this is permissible under CPUC ratemaking practices is unclear.

Alternative [1] CON

Given the public policy support for DSM activities, as well as interpretations of specific funding criteria in recently-enacted AB 1890, this does not appear to be a viable approach. For example, if one of the purposes of direct access is to create a more efficient market, one in which customers receive price signals reflecting actual costs of service, it is no different from the DSM-funded implementation of residential time-of-use pilot programs giving customers better control over how and when to use energy.

[2] Provide new utility funding recovered through a trust. The assertion that consumers should not be required to pay for a program to educate them is simply a smoke­and­mirrors statement. If retailers pay for education, they will just pass the costs on to consumers. Once we recognize that consumers will eventually pay the bill, the question is how to recover the money in the most efficient and equitable means possible. Utilities should not be required to fund significant educational efforts without appropriate compensation. Perhaps this could simply be another of the costs of a retail restructuring implementation trust that parallels that now being established for ISO/PX costs.

[3] Sell advertising space in educational materials. This approach can be both a short-term and long-term funding mechanism, whereby electric service providers (or related business enterprises) would buy advertising space (printed or electronic) or time (audio or video) in educational materials given to the public. The cost of the RESET's education effort would be borne, at least in part, by interested service providers, not by direct assessments on the utilities.

Longer-term funding possibilities are:

[4] Impose fees on retailers as part of the registration process. This approach imposes education costs solely on direct access participants. It avoids some of the problems with recovering charges within utility rates, and will be seen as equitable by some. However, it may also be seen as a barrier to competitive entry, since it is a fee that utility default service customers would not pay. Also, the CPUC's legal right to impose registration or kWh fees could be challenged, unless there are legislative changes.

[5] Use fines imposed on market participants for abusive practices. This approach is clearly a viable means of funding the trust. Unfortunately, such a source of funding is uncertain, and will certainly not be available in time to fund education programs prior to 1/1/98.

[6] Sell advertising space in printed educational material. Electric service providers (or related enterprises) wishing to advertise in space made available in printed or perhaps video educational media would pay for such advertising. Primarily a long-term funding mechanism, this approach could defray, perhaps to a large degree, the costs of disseminating educational messages.

Although all funding source alternatives present some problems, it is the hope of the DAWG that comments to be submitted on this report will help to refine the alternatives presented here and perhaps introduce others for the Commission's consideration.

5.4.4.3 Administration

RESET should be administered by a committee modeled after the committee that administered TET. Committee members could consist of Commission staff (including the Public Advisor and outreach officers), industry participants and various consumer groups. Committee members should be approved by the Commission and each member should have one vote. A trustee for the actual funds would need to be retained, as well as the services of an attorney. Fees for these services and committee operating expenditures should be approved by the Commission. (This includes expenses for consumer members, which should be subject to the same rules as those applicable to Commission staff.) The Committee should be responsible for reviewing various requests for proposals (RFPs) or grants submitted to it. An outside party (someone not on the committee) should be made available to assist parties with the writing of requests and grants. In other words, no group or individual should be automatically excluded from the process due to their inexperience in grant or request writing.

There are three disputed views about the criteria for membership on the administrative committee. The composition of the RESET Committee might vary from that shown in the Membership section of the sample charter in Section 5.5, depending on the criteria selected.

[1] Exclude Participants in CPUC Proceedings. Criteria should be established for consumer members similar to the criteria established for consumer members of the TET Disbursements Committee: (1) consumer members must have prior experience with mass consumer education programs; (2) consumer members must not have appeared before the Commission in formal proceedings, and (3) if consumer members are active in a consumer group, that group must be willing to forego competing for any monies the committee may grant or disburse.

[2] Select Capable Persons Irrespective of Their Other CPUC Activities. Some parties disagree that appearances before the CPUC or involvement in CPUC proceedings should disqualify a person from serving on the administrative committee. This would exclude some of the most knowledgeable and capable organizations concerning impacts and implications of electricity restructuring from participation. These are also the same groups with the trust and confidence of minority organizations. There is precedent for parties to the proceedings which led to the TET fund to receive monies for community education purposes.

[3] Select Any Capable Persons, but Limit Voting Rights. This alternative recognizes inherent advantages of including the most knowledgeable parties, but would prohibit any member from voting on a project for which that member's organization is eligible to receive funds. This alternative would eliminate the appearance or effect of conflict of interest.

5.4.5 Monitoring and Evaluation of Trust Performance

The CPUC would monitor and evaluate the performance of RESET's administrative committee. To help accomplish this, the CPUC would require the RESET Committee to submit periodic reports on the activities of the trust. In addition, the CPUC would exercise control over some RESET administrative actions.

[1] Periodic Reporting. The Trust committee would periodically report to the CPUC on the following items:

ï Amounts of money disbursed.

ï Names/Identities of fund recipients.

ï Purpose of programs funded.

ï Summaries of educational efforts, including: (1) Description of what was done; (2) Who the target groups were; (3) What the impacts of the efforts were (number of people contacted; what the response was, if appropriate).

ï Account balances.

[2] CPUC Control Over Certain Changes. A Commission resolution should be required for the trust committee to do the following:

ï Change the identity of the financial advisor or trustee.

ï Change either the committee structure or its membership.

ï Change the terms and conditions of the trust.

ï Obtain approval for an operating budget.

5.4.6 Concerns with a Trust Approach

Experience with other trust funds has shown that certain problems have arisen with the trust fund process. These problems are primarily in the area of definition of roles of the members and conflict of interest. Some parties believe that the RESET fund can be established in such a way as to avoid problem areas by implementing measures such as those listed below.

_ Voting Rights. Each member of the committee should have one vote. No member may vote on disbursement of funds it may receive. If a vote is tied, the Public Advisor should cast a tie-breaking vote.

_ Either experts should be hired to conduct a consumer outreach program, or the groups given funds should have extensive experience in this area.

_ Before any outreach education programs are conducted, ways of effectively monitoring efforts and measuring outreach results should be agreed upon by the committee.

_ The roles of committee members, the committee itself and the Commission should be distinctly defined.

_ Conflict of interest rules need to be explicitly defined and understood by everyone.

_ A "sunset" clause needs to be included in the terms and conditions of the trust.

5.5 Example Charter for the RESET

The Restructured Electric Service Education Trust (RESET) Committee will develop a charter detailing the purpose, structure, duties and conduct of RESET. An example of such a charter is provided in the remainder of this section.

The name of the committee shall be the Electric Consumer Education Trust Committee

(referred to hereafter as "RESET" Committee).

The RESET Committee's general purpose is Consumer Education mandated by ____________ (Section xxxx of the Public Utilities Code, or other authority), for providing education for consumers concerning the restructuring of the provision of electricity services in California.

A. Members. The RESET Committee shall be comprised of nine (9) members as follows:

1. Members shall include:

(a) Service Provider members -

(b) Consumer Members -

2. Member(s) ó Shall be two from the California Public Utilities Commission (CPUC), one each from San Diego Gas & Electric Co., Pacific Gas & Electric Co. and Southern California Edison, two from established consumer groups and two from electric service retailers in competition with established utilities.

B. Selection of Members. Initial selection shall be determined by the Commission. Thereafter, potential members of the RESET Committee shall be nominated by the organizations or constituencies they are to represent. The members of the RESET Committee shall be recommended for approval by the Commission's Executive Director, according to procedures preferred by the Commission.

C. Qualifications of Members. The qualifications of members shall be established by the RESET Committee in conjunction with the CPUC. In general, members shall have professional or technical expertise sufficient to enable them to be conversant with the responsibilities of RESET. Consumer members should be able to demonstrate organizational or other ties to the constituency they are representing, and in addition, they should not be employed by or represent the interests of any vendors or distributors who are providing or who may in the future provide equipment or services related to consumption of electricity, consistent with the Disclosure and Conflict of Interest Policy attached to this charter. (To be developed and attached.)

D. Term of Appointments. The terms of the members of RESET Committee shall be staggered, with one-third of the membership appointed each year. Initial appointments shall be for terms of one, two or three years; thereafter members will be appointed for three-year terms. A member may be re-appointed, but no member shall serve for more than two consecutive full terms.

E. Removal from Membership.

1. Membership may be terminated through resignation.

2. Members who fail to attend three consecutive meetings without just cause or proxy may be subject to removal from committee.

3. Any member of RESET Committee, on the recommendation of two-thirds of the RESET Committee, may be removed by the Commission's Executive Director for cause shown, in procedures preferred by the Commission.

F. Vacancies. Vacancies on the RESET Committee shall be filled from nominations submitted by the organization or constituency whose vacancy is being filled. The membership of persons filling a vacancy shall be selected and approved by the Commission's Executive Director using procedures preferred by the Commission. Vacancies for expired terms will be filled by full-term appointments; vacancies for unexpired terms will be filled for the remainder of the term.

G. Expenses. Consistent with Commission Resolution ___, consumer members of RESET Committee shall be entitled to appropriate reimbursement of expenses they incur in connection with their services on the RESET Committee. Expenses will be reimbursed in accordance with the Commission's travel expense claim rules applicable to its own employees. Utility members and other service providers are not eligible for expense reimbursement.

The RESET Committee shall have the following duties and responsibilities:

A. (To be specified.)

B. Provide representation on any specially created Task Force.

C. Perform other functions and duties as may be directed by the CPUC.

A. Regular Meetings. The RESET Committee shall hold such meetings as it shall decide are necessary or appropriate in order to carry out its functions. The succeeding meeting, place, time and location shall be scheduled at the preceding meeting. All meetings shall be open to the public, shall be noticed, shall be conducted pursuant to Robert's Rules of Order, 199x Edition, and shall be otherwise held in accordance with the provisions of Government Code Sections 11120 ff.

B. Special Meetings of the Committee. Special meetings of the RESET Committee may be called by the Chair or by a quorum. All RESET Committee members are to be notified at least three days prior to the special meeting.

Such notices shall:

1. Set forth the date, time and location of such meeting.

2. State the business to be conducted at such meeting.

C. Public Participation. All meetings will be open to the public. Each meeting shall have a specific portion of the meeting agenda devoted to the presentation of questions, comments, and suggestions from any non-member of RESET present on accordance with Government Code Sections 11120 ff. Members from the public and observers shall not be permitted to take part in any meeting unless recognized by the Chair. The RESET may limit time for public participation, depending on the number of participants and the content of the overall agenda.

D. Quorum. Three or four authorized members or their designated representatives (depending on whether the total number of members is five, six or seven) shall be necessary to constitute a quorum for performing RESET Committee functions. No action shall be taken unless a quorum is present. A majority of the members present at a meeting, whether or not a quorum is present, may adjourn the meeting to another time or place. Any adjourned meeting shall be subject to the same notice requirements as a regular meeting.

E. Proxies. A member may be represented at any meeting by oral or written authorization by that member to the chair naming a designated individual to represent the member at a specified, noticed meeting. Any proxy may be revoked at any time before the meeting begins by oral or written notice to the chair by the member who gave the proxy.

F. Motions. Any member may submit motions from the floor for RESET vote.

G. Agenda. Each notice of meeting shall be accompanied by an agenda setting forth the matters that are expected to be presented at the meeting. Each agenda shall include allotted time for public input. Except in an emergency and with the approval of a majority of the members present, RESET Committee shall not consider at any meeting an item not on the agenda.

H. Participation. Members of the public and observers shall not be permitted to take part in any meeting unless recognized by the chair.

A. Two Officers. The RESET Committee shall have a Chairperson and a Vice Chairperson, both of whom shall be elected by a majority of the members to serve for one year from date of election and may be re-elected.

B. Duties. The Chairperson shall be the executive officer of the RESET Committee and subject to the control of the RESET Committee and this Charter, have the general supervision and direction of the affairs of the RESET Committee. The Chairperson shall preside at all general and special meetings of RESET Committee, set the agenda for place and time of meetings, appoint Task Forces as needed, and submit proposals and recommendations to the CPUC. In the event of a vacancy of the office of Chairperson, the vacancy shall be filled by a majority vote of the members of RESET Committee. The Chairperson so appointed shall serve out the term of the vacancy that has been filled.

The Vice Chairperson shall perform the duties of the Chairperson when the Chairperson is unavailable.

The RESET Committee may recommend that the Charter be amended at a regular meeting by a vote of a majority of its voting members. Any proposed amendment must have either been proposed at a previous meeting or have been received by RESET Committee members at least ten days in advance. Any revisions shall not become effective until approved by the CPUC.

Members of the Committee, who are not members of the Commission staff, are uncompensated servants of the Commission and the State of California within the meaning of Section 810.2 of the Government Code. The State will accordingly indemnify them as it indemnifies its compensated employees, and will provide them representation by the California Attorney General, for their acts done within the course and scope of the services they perform for the Committee, as provided in Government Code Sections 825 et seq. and Sections 995 et. seq.

IN WITNESS WHEREOF, we the undersigned members of the Electric Consumer Education Trust Committee do hereby constitute, establish, and adopt this as the charter for said committee effective as of the day, month, and year first written.