Oregon Public Utility Commission

Rule Rule 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 (“Promotional Activity” Defined) and 860-026-0015 (“Promotional Concession” Defined);

(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 (Definitions for Utility Sales Promotion)(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 (Hearing to establish new schedules) and 759.180 (Hearing on reasonableness of rates), 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 (Complaint), 757.210 (Hearing to establish new schedules), or 759.180 (Hearing on reasonableness of rates).

(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.
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Last accessed
Jun. 8, 2021