Dead Bill’s Concept Compels CPUC To Revise Billing Rule

October 29, 2010
Contact: Rodney Foo @ (408) 282-8920

Proposed legislation introduced by Assemblymember Jim Beall to give small businesses greater protection from retroactive billing by utilities but later vetoed by the Governor has led the California Public Utilities Commission to change its back-billing rules.

“The bill might have died but without it, the CPUC wouldn’t have been sufficiently motivated to protect small businesses throughout our state,’’ Beall said. “For small businesses, being forced to pay for a mistake their utility made three years ago can put them out of business. Many of them lack sufficient cash flows to overcome large and unexpected cost.’’

On Thursday, the CPUC announced it was revising its tariffs to limit the time that a utility may seek back-billing costs against small businesses from three years to three months.

In February, Beall sought the same change when he introduced AB 1879. The bill was drafted following discussions with a restaurant owner who contacted Beall’s office after receiving a retroactive bill from PG&E. The utility sought to recover more than $60,000 for three years of alleged under charges due to a gas meter that was alleged to be malfunctioning. The size of the bill could have driven the restaurant owner out of business. The owner and PG&E eventually arrived at a mutual agreement.

But the circumstances raised troubling questions about a utility’s authority to suddenly present a consumer with a steep bill seeking back payments without offering any supporting proof other than an admission that a meter it owned and was responsible for maintaining had been on the blink.

AB 1879 bill played a key role in getting the CPUC to focus on its back-billing rules for small businesses, said Hayley Goodson, staff attorney for The Utility Reform Network (TURN), a non-profit consumer advocacy group.

“Through AB 1879, Assemblymember Beall brought the importance and urgency of changing existing utility billing rules to everyone’s attention,’’ Goodson said. “In short order, the CPUC opened a proceeding to revise the back-billing rules for small business utility customers, which resulted in Thursday’s decision adopting new consumer protections. TURN is grateful to Assemblymember Beall for jump-starting this process.’’

AB 1879 was passed by the Legislature, but was vetoed by the Governor because in the months following the bill’s introduction the CPUC indicated a willingness to look into the issue.

“This bill requires the California Public Utilities Commission to open a proceeding to reconsider their previous decision on the three-year limit on billing undercharged amounts due to meter and billing errors,’’ the Governor said. “On May 12, 2010, the CPUC opened a proceeding nearly identical to the one required by this bill.’’