CPUC Adopts $7.7 Million Settlement with Edison for Improper Collection of Deposits
SAN FRANCISCO – The California Public Utilities Commission (CPUC) today approved a $7.7 million settlement with Southern California Edison (SCE) over the utility’s improper requests for service deposits from residential and small business customers.
Under the settlement negotiated by the CPUC’s Consumer Protection and Enforcement Division (CPED), SCE will use shareholder funds to:
- Pay $3.1 million to residential customers who were billed a service deposit on or after April 1, 2020.
- Contribute $3.9 million to SCE’s Energy Assistance Fund, which helps customers struggling to pay their electricity bills.
- Pay a $700,000 penalty to the State’s General Fund.
“Today’s outcome resolves serious compliance issues by SCE with regards to customer protections put in place during the COVID-19 emergency,” said CPUC President John Reynolds. “When utilities engage in violations of CPUC policy, especially when it involves unlawful billing, we work hard to ensure that restitution reaches victims. That restitution amounts to more than $7.7 million of penalties in this case and it will be paid for by SCE shareholders. This would not have been possible without the work of our Consumer Protection and Enforcement Division and I applaud their work in reaching a fair and reasonable settlement.”
Background
On April 17, 2020, the CPUC issued Resolution M-4842, directing investor-owned utilities to implement consumer protections using the emergency disaster relief program guidelines set during the COVID-19 pandemic. This included waiving deposits for residential and small business customers retroactively to March 4, 2020, the date of Governor Gavin Newsom’s declaration of a State of Emergency in response to the COVID-19 pandemic. In addition, the CPUC adopted Decision 20-06-003 on June 11, 2020, which prohibits the utilities from requiring any residential and small business customers to pay a deposit for the establishment of service. Moreover, on December 17, 2020, the CPUC issued Resolution UEB-006, approving a citation program to enforce compliance with the disconnection rules adopted in the June 2020 decision.
On March 10, 2021, SCE reported to the CPUC that it sent deposit requests to its residential customers between June 11, 2020, to the end of February 2021. SCE stated that it was unable to update its system to prevent asking for deposits from residential and small business customers who signed up between April 17, 2020, and April 6, 2021. Although SCE attempted to prevent the collection of deposits, SCE was unable to prevent deposits from being requested. SCE implemented temporary manual processes and workarounds until a permanent solution was implemented on Aug. 30, 2021, to prevent the billing and collection of service deposits. The settlement approved today resolves these violations through shareholder-funded measures.
“Every dollar matters to families struggling to keep the lights on. This agreement holds SCE accountable and delivers financial relief, with shareholders bearing the cost. Public trust depends on turning our promises into protections people can count on,” said Commissioner Christine Harada.
The settlement is formally referred to as an Administrative Consent Order (ACO). This enforcement tool is one of many included in the CPUC’s Enforcement Policy, established in 2020 to better serve Californians through streamlined enforcement actions in lieu of issuing citations or seeking formal Order Instituting Investigations. The addition of these tools to the CPUC’s enforcement options in 2020 moved the CPUC’s practices more in line with the enforcement practices of many other state and local enforcement agencies.
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The CPUC regulates services and utilities, protects consumers, safeguards the environment, and assures Californians access to safe and reliable utility infrastructure and services. Visit www.cpuc.ca.gov for more information.