Southern California Edison shareholders are on the hook for $7,767,700 to resolve allegations that the utility improperly billed service deposits to residential and small-business customers during the COVID-19 pandemic, when such charges were supposed to be off the table. The California Public Utilities Commission approved the settlement, which covers restitution, an energy-assistance contribution, and a state penalty.
According to Action News Now, the commission approved the $7.7 million settlement over allegations of improper deposit requests sent to residential and small-business customers. The agreement, formally known as an administrative consent order, directs Southern California Edison to pay $3.1 million to residential customers who were billed a service deposit on or after April 1, 2020, using shareholder funds rather than ratepayer money.
Where the Rest of the Money Goes
Beyond the customer restitution, the utility will contribute $3.9 million to its energy assistance fund, and pay a $700,000 penalty to California's General Fund, per the same outlet's report. A draft resolution from the California Public Utilities Commission states that SCE agreed to pay a total of $7,767,700 at shareholders' expense, consistent with the overall figure cited in the settlement.
A CPUC resolution draft says 65,773 residential customers were billed deposits between April 1, 2020, and August 31, 2021.
Why the Charges Happened in the First Place
The CPUC had barred utilities from requiring these deposits as part of its pandemic consumer protections. The commission adopted Decision 20-06-003 on June 11, 2020, which the CPUC says prohibits investor-owned utilities from requiring any residential customer to pay establishment-of-credit deposits for new service or reestablishment-of-service deposits, according to the California Public Utilities Commission. That decision built on earlier emergency measures, which, per a CPUC filing, retroactively applied customer protection measures from March 4, 2020, onward and suspended disconnections for customers who hadn't paid bills.
Southern California Edison said it could not update its billing system in time to prevent deposit requests from going out to residential and small-business customers who signed up for service between April 17, 2020, and April 6, 2021, according to Action News Now's report. The utility implemented temporary manual processes in the meantime, the outlet reports, until a permanent fix was put in place on August 30, 2021.
Not the First Utility Caught in This Net
Southern California Edison isn't the only California utility the CPUC has pursued over this issue. The commission has previously reached a settlement with SoCalGas over improper collection of service deposits, directing that utility to make payments to affected customers as well, per the commission's own announcement on that case. The commission's enforcement policy, established in 2020 to streamline enforcement actions, has underpinned both cases.
The settlement closes out a compliance matter tied directly to the early, chaotic months of the pandemic, when state regulators scrambled to shield households and small businesses from utility shutoffs and added fees while the broader economy was in upheaval. For the tens of thousands of customers identified in CPUC filings as having been billed deposits they shouldn't have owed, the shareholder-funded restitution represents the tail end of a process that began with emergency rules issued more than five years ago.
