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PUBLIC UTILITY COMMISSION
DIVISION 26
SALES PROMOTION
860-026-0000
Applicability of Division 26
(1) The rules contained in this
Division apply to energy utilities and large telecommunications utilities, as defined
in OAR 860-026-0005.
(2) Upon request or its own
motion, the Commission may waive any of the Division 026 rules for good cause shown.
A request for waiver must be made in writing, unless otherwise allowed by the Commission.
Stat. Auth.: ORS 183, 756, 757
& 759
Stats. Implemented: ORS 756.040,
759.030, 759.040 & 759.045
Hist.: PUC 14-1997, f. &
cert. ef. 11-20-97; PUC 3-1999, f. & cert. ef. 8-10-99; PUC 14-2000, f. &
cert. ef. 8-23-00; PUC 11-2001, f. & cert. ef. 4-18-01; PUC 6-2011, f. &
cert. ef. 9-14-11
860-026-0005
Definitions for Utility Sales Promotion
As used in OAR 860-026-0005 through 860-026-0045, unless the context requires otherwise:
(1) "Affiliate" means "affiliated interest," as defined in ORS 757.015 and 759.390.
(2) "Appliance or equipment" includes any device which consumes electric and/or gas energy and any ancillary device required for its operation.
(3) "Consideration" includes any cash, donation, gift, allowance, rebate, bonus, merchandise (new or used), property (real or personal), labor, service, conveyance, commitment, right, or other thing of more than token value.
(4) "Energy efficiency" means any installation or action intended to reduce the amount of energy required to achieve a given purpose or to shift the timing of the use of energy to achieve greater efficiency in the use of a public utility system.
(5) "Energy utility" means a public utility as defined in ORS 757.005 except a water utility or wastewater utility. An energy utility can be an "electric company," "gas utility," or "steam heat utility."
(6) "Financing" includes acquisition of equity or debt interests, loans, advances, sale and repurchase agreements, sale and leaseback agreements, sales on open account, conditional or installment sales contracts, or other investments or extensions of credit.
(7) "Large telecommunications utility" means a telecommunications utility, as defined in ORS 759.005, that is not partially exempt from regulation under ORS 759.040.
(8) "Person" includes any individual, group, firm, partnership, corporation, association, organization, or public or private entity.
(9) "Utility" means all energy and large telecommunications utilities, as defined in sections (5) and (7) of this rule.
Stat. Auth.: ORS 183, 756, 757 & 759
Stats. Implemented: ORS 757.005 & 757.015
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 2-1993, f. & cert. ef. 1-8-93 (Order No. 92-1793 & 93-035); PUC 9-1995, f. & cert. ef. 8-30-95 (Order No. 95-861); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01; PUC 7-2005, f. & cert. ef. 11-30-05
860-026-0010
"Promotional Activity" Defined
"Promotional activity" means action by an energy or large telecommunications utility or its affiliate with the objective of increasing or preventing a decrease in the quantity of the energy or large telecommunications utility's service used by present and prospective customers; inducing any person to use an energy utility's service rather than a competing form of energy, the cost of which is properly chargeable to account number 911, 912, 913, or 916 of the Uniform System of Accounts as adopted by OARs 860-027-0045 and 860-027-0055; or inducing any person to use a large telecommunications utility's service rather than a competitive provider's service.
Stat. Auth.: ORS 183, ORS 756 & ORS 759
Stats. Implemented: ORS 756.040 & ORS 759.267
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01
860-026-0015
"Promotional Concession" Defined
(1) "Promotional concession" means any consideration offered or granted by an energy or large telecommunications utility or its affiliate to any person with the object, express or implied, of inducing such person to select or use the service or additional service of such utility, or to select or install any appliance or equipment designed to use such utility service.
(2) For purposes of illustration, and without limiting the definition in section (1) of this rule, "promotional concession" includes:
(a) Financing real property, including the construction of any building thereon, when such property is not owned or otherwise possessed by and not intended for the immediate use of the energy or large telecommunications utility or its affiliate;
(b) Furnishing consideration to any architect, builder, engineer, subdivider, developer, or other person for work done or to be done on property not owned or otherwise possessed by and not intended for the immediate use of the energy or large telecommunications utility or its affiliate; except for studies to determine comparative capital cost and expenses to show the desirability or feasibility of selecting one form of energy over another;
(c) Acquisition from any builder, subdivider, developer, or other person of any easement, right-of-way, license, lease or other property for consideration in excess of the reasonable cost or value thereof;
(d) Furnishing consideration to any dealer, architect, builder, engineer, subdivider, developer, or other person for the sale, installation or use of any appliance or equipment;
(e) Providing free, or at less than cost or value, any wiring, piping, appliance, or equipment to any other person; but an energy or large telecommunications utility, engaged in an appliance merchandising sales program, is not precluded from conducting legitimate close-outs of appliances, clearance sales and sales of damage or returned appliances;
(f) Providing free, or at less than cost or value, any installation, operation, repair, modification, or maintenance of any appliance, equipment, wiring or piping of any other person;
(g) Granting a trade-in allowance on the purchase of any appliance or equipment in excess of the fair market value of the trade-in; or the granting of an allowance for such appliance or equipment when such allowance varies by reason of the type of energy consumed in such appliance or equipment;
(h) Financing the acquisition of any appliance or equipment at a rate of interest or on terms more favorable than those generally applicable to sales by nonutility dealers in such appliances or equipment;
(i) Furnishing consideration to any person for any advertising or publicity purpose of such person; and
(j) Guaranteeing the maximum cost of electric or gas utility service.
(3) "Promotional concession" excludes:
(a) Making any temporary emergency repairs to appliances or equipment of a customer, or performing any other repairs or maintenance for which the customer is charged at least at cost;
(b) Inspecting and adjusting appliances or equipment which consumes electric or gas energy;
(c) Providing appliances or equipment incidental to their demonstration for 60 days or less;
(d) Providing light bulbs, street or outdoor lighting service, service pipe or other service equipment or appliances, in accordance with tariffs filed with and approved by the Commission;
(e) Providing appliances or equipment to an educational institution for the purpose of instructing students in the use of such appliances or equipment;
(f) Rebates, low interest loans, and other considerations for Commission-approved energy efficiency programs; and
(g) Testing of new products and equipment that are expected to result in their inclusion in a Commission-approved energy efficiency program.
Stat. Auth.: ORS 183, ORS 756 & ORS 759
Stats. Implemented: ORS 756.040 & ORS 759.267
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 2-1993, f. & cert. ef. 1-8-93 (Order No. 92-1793 & 93-035); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01
860-026-0020
Standards Governing Promotional Activities and Concessions
(1) All promotional activities and concessions shall be just and reasonable, prudent as a business practice, economically feasible and compensatory, and reasonably beneficial both to the energy or large telecommunications utility and its customers. The cost of promotional activities and concessions must not be so large as to impose an undue burden on the energy or large telecommunications utility's customers in general and must be recoverable through related sales stimulation within a reasonable time.
(2) No energy or large telecommunications utility or its affiliate shall:
(a) Directly or indirectly, in any manner or by any device whatsoever, offer or grant any promotional concession except such as is uniformly and contemporaneously extended to all persons in a reasonably defined class;
(b) Engage in any promotional concession that creates an undue preference or advantage to any person or subjects any person to any undue prejudice or disadvantage;
(c) Engage in any promotional concession that establishes or maintains any unreasonable difference between localities or as between classes of customer; or
(d) Insert, or seek to enforce, any covenant or other provisions in any deed, mortgage, lease, or any other instrument related to realty that restricts the form of energy which may be used upon such realty.
Stat. Auth.: ORS 183, ORS 756 & ORS 759
Stats. Implemented: ORS 756.040 & ORS 759.267
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01
860-026-0022
Presumptions of Reasonableness of Advertising Expenses in Utility Rate Cases
(1) As used in this rule:
(a) "Advertising Expenses" means expenses for communications which inform, influence, and/or educate customers. Such communication may be by means of, but is not limited to, print, radio, television, billboards, direct mail, videos, banners, telephone listings, and displays;
(b) "Conservation Advertising Expenses" means advertising expenses, the primary purpose of which is to decrease the total consumption of utility services;
(c) "Institutional Advertising Expenses" means advertising expenses, the primary purpose of which is not to convey information, but to enhance the credibility, reputation, character, or image of an entity or institution;
(d) "Legally Mandated Advertising Expenses" means advertising expenses, the primary purpose of which is to comply with:
(A) Local, state, or federal statutes, ordinances, rules, or regulations; and
(B) Court or Commission's orders.
(e) "Political Advertising Expenses" means advertising expenses, the primary purpose of which is to state or imply that persons should take a specific political action;
(f) "Promotional Advertising Expenses" means advertising expenses, the primary purpose of which is to communicate with respect to an energy or large telecommunications utility's promotional activities or promotional concessions, as defined in OARs 860-026-0010 and 860-026-0015;
(g) "Utility Information Advertising Expenses" means advertising expenses, the primary purpose of which is to increase customer understanding of utility systems and the function of those systems, and to discuss generation and transmission methods, utility expenses, rate structures, rate increases, load forecasting, environmental considerations, and other contemporary items of customer interest;
(h) "Utility Service Advertising Expenses" means advertising expenses, the primary purpose of which is to supply timely customer information about utility services such as changes in office hours, planned service repair interruptions, the closing or opening of new pay stations, or to encourage efficient and safe use of utility services and similar service-related subjects;
(i) "Nonutility Advertising Expenses" means advertising expenses, the primary purpose of which is to provide information about or encourage purchase of products or services whose revenues fall outside the scope of rate of return regulation by a state or federal regulatory body;
(j) "Energy Efficiency Advertising Expenses" means advertising expenses, the primary purpose of which is to promote energy efficiency, as defined in OAR 860-026-0005(7).
(2) For the purposes of this rule, advertising expenses are categorized as follows:
(a) Category "A" – Energy efficiency or conservation advertising expenses that do not relate to a Commission-approved program, utility service advertising expenses, and utility information advertising expenses;
(b) Category "B" – Legally mandated advertising expenses;
(c) Category "C" – Institutional advertising expenses, promotional advertising expenses and any other advertising expenses not fitting into Category "A," "B," or "D";
(d) Category "D" – Political advertising expenses and nonutility advertising expenses; and
(e) Category "E" – Energy efficiency or conservation advertising expenses that relate to a Commission-approved program.
(3) For rate-making purposes:
(a) Advertising expenses in Category "A" are presumed to be just and reasonable in a rate proceeding to the extent that expenses are twelve and one-half hundredths of 1 percent (0.125 percent) or less of the gross retail operating revenues determined in that proceeding;
(b) Advertising expenses in Category "B" are presumed to be just and reasonable for rate-making purposes;
(c) The energy or large telecommunications utility shall carry the burden of showing that any advertising expenses in Category "C" are just and reasonable for rate-making purposes. In any rate filing under ORS 757.210 and ORS 759.180, the utility shall separately state the amount of advertising expenses in Category "C";
(d) Advertising expenses in Category "D" are presumed to be not just and reasonable for rate-making purposes; and
(e) With Commission approval, advertising expenses in Category "E" may be capitalized. The Commission will review the prudence of such expenses in a general rate proceeding pursuant to ORS 756.500, ORS 757.210, or ORS 759.180.
(4) The presumptions in section (3) of this rule are rebuttable. An energy or large telecommunications utility seeking to include expenditures in excess of amounts in section (3) of this rule shall have the burden of showing that the expenditures are just and reasonable. Parties challenging expenditures which are equal to or less than the amounts in section (3) of this rule have the burden of showing that the expenditures are not just and reasonable.
Stat. Auth.: ORS 183, ORS 756, ORS 757 & ORS 759
Stats. Implemented: ORS 756.040
Hist.: PUC 1-1975, f. & ef. 7-20-76 (Order No. 76-467); PUC 7-1981, f. & ef. 8-12-81 (Order No. 81-515); PUC 5-1983, f. 5-31-83, ef. 6-1-83 (Order No. 83-284); Renumbered from 860-021-0071; PUC 22-1985, f. 12-11-85, ef. 1-1-86 (Order No. 85-1170; PUC 16-1990, f. 9-28-90, cert. ef. 10-1-90 (Order No. 90-1105); Renumbered from 860-021-0605; PUC 2-1993, f. & cert. ef. 1-8-93 (Order No. 92-1793 & 93-035); PUC 9-1995, f. & cert. ef. 8-30-95 (Order No. 95-861); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01
860-026-0025
Filing of Proposed Promotional Concessions
(1) An energy utility or its affiliate shall not offer, grant, or vary any promotional concession directly or indirectly, or in concert with others, or by any means whatsoever, unless the energy utility has filed a description of such concession with the Commission. The energy utility shall furnish a copy of the filing to each other energy utility providing service in any portion of the service area of the filing utility.
(2) A large telecommunications utility shall not:
(a) Offer, grant, or vary any promotional concession for a regulated service directly or indirectly, or in concert with others, or by any means whatsoever, unless the large telecommunications utility has filed a description of such concession with the Commission; and
(b) Promote any regulated service, directly or indirectly, for more than a total of 180 days in any 12-month period.
Stat. Auth.: ORS 183 & ORS 756
Stats. Implemented: 756.105
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01; PUC 10-2002, f. & cert. ef. 2-26-02
860-026-0030
Notice and Effective Date of Promotional Concessions for Energy Utilities
All filings required from energy utilities by OAR 860-026-0025 shall be effective upon 30 days' notice to the Commission, subject to suspension and cancellation by the Commission. However, the Commission may allow changes without requiring the 30 days' notice by entering an order specifying the changes to be made and the time when they shall take effect.
Stat. Auth.: ORS 183 & ORS 756
Stats. Implemented: ORS 757.007 & ORS 757.220
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 16-2001, f. & cert. ef. 6-21-01; PUC 10-2002, f. & cert. ef. 2-26-02
860-026-0035
Reports of Promotional Activities and Concessions for Energy Utilities
(1) Each energy utility shall file, concurrently with the annual report required by law, a report of each promotional activity and concession of the utility and its affiliates during the preceding calendar year. The report shall show the amounts expended with respect to each promotional activity and concession and a statement of the benefits achieved from each.
(2) In reporting on each promotional activity or concession under this rule, an energy utility shall employ the lowest practicable subprogram for budget and accounting purposes.
Stat. Auth.: ORS 183, ORS 756 & ORS 757
Stats. Implemented: ORS 756.105
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 2-1993, f. & cert. ef. 1-8-93 (Order No. 92-1793 & 93-035); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 17-1998, f. & cert. ef. 10-12-98; PUC 16-2001, f. & cert. ef. 6-21-01; PUC 1-2002, f. & cert. ef. 1-3-02
860-026-0040
Investigations of Promotional Activities and Concessions
Nothing in OAR 860-026-0005 through 860-026-0040 is intended to prevent the Commission from investigating, either formally or informally, any promotional activity or concession, or the costs thereof, of any energy or large telecommunications utility.
Stat. Auth.: ORS 183 & ORS 756
Stats. Implemented: ORS 756.040 & ORS 756.070 - ORS 756.115
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 16-2001, f. & cert. ef. 6-21-01
860-026-0045
Promotional Concessions Offered or Granted on the Effective Date of These Rules
(1) Notwithstanding OARs 860-026-0025 and 860-026-0030, any promotional concession offered or granted by an energy or large telecommunications utility or its affiliate before July 1, 1971, may remain in force, subject to suspension and cancellation, if:
(a) A description of such concession was filed with the Commission not later than 5 p.m., June 30, 1971;
(b) Such filing includes a statement signed by the responsible officer of the energy or large telecommunications utility that any such promotional concession is in compliance with OAR 860-026-0020; and
(c) A copy of the description of such concession has been furnished to each other utility providing service in any portion of the service area of the filing utility.
(2) No other promotional concession shall be offered or granted on or after July 1, 1971, except in compliance with OAR 860-025-0005 through OAR 860-026-0040.
Stat. Auth.: ORS 183 & ORS 756
Stats. Implemented: ORS 756.105
Hist.: PUC 164, f. 4-18-74, ef. 5-11-74 (Order No. 74-307); PUC 9-1998, f. & cert. ef. 4-28-98; PUC 16-2001, f. & cert. ef. 6-21-01
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