Section 295.10  Advertising Standard

 

In any general rate increase request by any gas or electric utility as prescribed in General Order 157, the following advertising standard shall apply to the utility's direct presentation to the Commission.  Nothing in this Part shall prevent the utility from presenting a proposed method of expensing advertising costs at variance with this general standard so long as in addition to any variance testimony, the advertising expenses are presented as contained in this Part.

 

a)         Unless the Commission otherwise orders, no electric or gas utility shall include as an operating expense in the test year computation any direct or indirect expenditures for promotional, political, institutional or goodwill advertising. In determining whether to allow a variation from this provision, the Commission shall consider, among other things, whether the advertising at issue is necessary to protect consumers, to promote more efficient use of the public utility's system, or to allow the public utility to compete effectively against non-regulated competitors.

 

b)         In making the computation of allowable operating expenses, the utility shall not include any direct or indirect expenditure for advertising which contains any nonallowable material in the expenditure.

 

c)         In providing the advertising expenses as prescribed in this Part, or in any proposed variance to the general standard, the utility shall complete and include in its direct presentation to the Commission, a form entitled "Rate Case Advertising Expense," as prescribed by the Commission.

 

Section 295.20  Definitions

 

a)         Advertising – The term Advertising means the commercial use, by an electric or gas utility, of any media, including newspapers, printed matter, radio and television, in order to transmit a message to a substantial number of members of the public or to such utility's consumers. In determining what constitutes a "substantial number," the Commission shall consider, among other things, the medium of communication used, the actual number of persons reached, and the size of the utility involved.

 

b)         Political Advertising – The term Political Advertising means any advertising for the purpose of influencing public opinion with respect to the legislative, administrative or electoral matters, or with respect to any controversial issue of public importance.

 

c)         Promotional Advertising – The term Promotional Advertising means any advertising for the purpose of encouraging any person to select or use the service or additional service of a utility or the selection or installation of any appliance or equipment designed to use such utility's service.

 

d)         Goodwill or Institutional Advertising – The term Goodwill or Institutional Advertising means any advertising either on local or national basis designed primarily to bring the utility's name before the general public in such a way as to improve the image of the utility or to promote controversial issues for the utility or the industry.

 

Section 295.30  Allowable Advertising Expenses

 

The following categories of advertising shall be considered allowable operating expenses:

 

a)         Advertising which informs consumers how they can conserve energy or can reduce peak demand for electric or gas energy;

 

b)         Advertising required by law or regulations, including advertising required under Part I of Title II of the National Energy Conservation Policy Act (see 42 U.S.C. Chapter 91, Subchapter II);

 

c)         Advertising regarding service interruptions, safety measures or emergency conditions;

 

d)         Advertising concerning employment opportunities with such utility;

 

e)         Advertising which promotes the use of energy efficient appliances, equipment or services;

 

f)         Explanations of existing or proposed rate schedules or notifications of hearings thereon;

 

g)         Advertising regarding customer service which directly relates to the utility service received by the customer, identifies company employees and their functions, explains the company's terms and conditions of service and identifies the location and operating hours of company business offices;

 

h)         Advertising which promotes the shifting of demand from peak to off-peak hours or which encourages the off-peak usage of the service;

 

i)          "Other" categories of advertisements not includable in subsections (a) through (h) but which are not political, promotional, institutional or goodwill advertisements.

 

Section 295.40  Materials to be Made Available

 

In any general rate increase proceeding in which this Part applies the following materials shall be made available to the Commission Staff at the time of the start of the Staff investigation.

 

a)         Copies of all advertisements and scripts included in the test year operating expense, listing the production costs for each ad, the publication schedule and costs for each ad;

 

b)         Copies of all advertisements included in the test year operating expense purchased on a cooperative basis with manufacturers, developers or others and the company's cost for each ad;

 

c)         All expenses incurred by the utility included in the test year operating expense for ads or scripts produced by a trade association.  Include all monies paid to the association for advertising purposes, either in the form of dues, assessments or subscriptions;

 

d)         If a forecast "Test Year" is selected so that actual data is not available by the end of the proceeding the utility shall provide the data in subsections (a), (b) and (c) of this Section for the most recent twelve-month period for which actual data is available.  The utility shall include a statement of assumptions as to its "Test Year" expenses and a statement of its advertising policy in the "Test Year."