Consumer Federation of California

In its recent regulatory filing, the Consumer Federation of California (CFC) attacks the arguments of investor owned utilities (referred to as IOUs by state regulators) seeking to avoid regulatory liability for abuses of private consumer data taken from smart meters by non-utility third parties.

San Diego Gas and Electric Company and the other California investor owned power utilities have argued against California’s Public Utilities Commission extending its jurisdiction over companies that the utilities allow to use private consumer data collected from smart meters. The utilities are claiming no responsibility for consumer privacy as long as another non-utility third party is involved, despite other legal requirements for utilities to safeguard sensitive consumer information. The argument is that the law does not permit CPUC to regulate any entity that is not already regulated as a public utility.

According to CFC, the California Constitution and Public Utilities Code definitively set a standard for utilities to keep consumer information from improper disclosure. CFC cites two specific Public Utilities Code sections at 2111 and 2112 that clearly identify non-utility firms and their employees as violators subject to CPUC jurisdiction, in the same manner as sections 2109 and 2110 relate to CPUC having explicit jurisdiction over public utilities:

"2111. Every corporation or person, other than a public utility and its officers, agents, or employees, which or who knowingly violates or fails to comply with, or procures, aids or abets any violation of any provision of the Constitution of this state relating to public utilities or of this part ‘ is subject to a penalty of not less than five hundred dollars ($500), nor more than twenty thousand dollars ($20,000) for each offense."

"2112. Every person who, either individually, or acting as an officer, agent, or employee of a corporation other than a public utility, violates any provision of this part, ‘ is guilty of a misdemeanor, and is punishable by a fine not exceeding one thousand dollars ($1,000), or by imprisonment in a county jail not exceeding one year, or by both such fine and imprisonment..’

Where the California Codes establish that an infraction or misdemeanor is a crime, then CFC’s citations above appear to show that CPUC may punish non-utility entities for such crimes. CFC further argues that when those entities are brought into the regulatory scheme by involvement through utility contract options, CPUC has jurisdiction and can investigate utility involvement in consumer privacy issues in those contracts.

Limiting utility liability by limiting CPUC jurisdiction would be a benefit to utility-owning holding companies such as Sempra Energy and PG&E Corporation, where both IOU holding companies have collectively paid out or pledged hundreds of millions in state settlements or disaster response payments due to San Diego and San Bruno utility-caused explosions and wildfires.

SDG&E owner Sempra Energy’s stated dividend policy is to provide quarterly dividend payments to shareholders of record at 35-40 percent of retained earnings. CPUC has already cited holding company profit demands as a cause of utilities not having sufficient working and other capital to improve infrastructure, such as putting overhead power lines underground, a task that SDG&E has previously estimated not to be done until 2063.