Sec. 16-19d. Advertising not to be deemed an operating expense for purposes of rate-making. Disclosure of source of payment for advertising.
Sec. 16-19d. Advertising not to be deemed an operating expense for purposes
of rate-making. Disclosure of source of payment for advertising. (a) As used in this
section:
(1) "Advertising" means the commercial use of any media including, but not limited
to, newspaper and all other forms of print, radio and television, in order to transmit a
message to a substantial number of members of the public or customers of a public
service company;
(2) "Political advertising" means any advertising for the purpose of influencing
public opinion with respect to any legislative, administrative or electoral decision or
with respect to any controversial issue of public importance;
(3) "Institutional advertising" means any advertising which is designed to create,
enhance or sustain a public service company's image or good will with regard to the
general public or its customers;
(4) "Promotional advertising" means any advertising that has the purpose of inducing the public to select or use the service or additional service of a public service company
or select or install any appliance or equipment designed to use such service, provided
such advertising shall not include advertising authorized by order or regulation of the
Department of Public Utility Control.
(b) The cost of political, institutional or promotional advertising of any gas, electric
or electric distribution company and the cost of political or institutional advertising of
any telephone company shall not be deemed to be an operating expense in any rate
schedule proceedings held pursuant to section 16-19. For the purposes of this section,
political, institutional or promotional advertising shall not be deemed to include reasonable expenditures for (1) the publication or distribution of existing or proposed tariffs
or rate schedules; (2) notices required by law or regulation; (3) public information regarding service interruptions, safety measures, emergency conditions, employment opportunities or the means by which customers can conserve energy or make efficient and
economical use of service; (4) the promotion or marketing of efficient gas and electric
equipment which the Department of Public Utility Control determines: (A) Is consistent
with the state's energy policy; (B) is consistent with integrated resource planning principles; (C) provides net economic benefit to such company's customers and (D) shall not
have the primary purpose of promoting one fuel over another; or (5) advertising by a
gas company that is necessary as a result of competition created by actions and decisions
of the Federal Energy Regulatory Commission and the Department of Public Utility
Control. Such advertising shall be limited to the express purpose of promoting gas companies in competition with other providers and marketers of natural gas. Such advertising
shall not include any promotions, cash, equipment, installation or service subsidies for
the conversion to natural gas from any other energy source.
(c) A public service company shall make application to the department for determination that equipment meets the requirements of subdivision (4) of subsection (b) of
this section. The department shall, to the extent practicable, make such determination
within one hundred twenty days of such filing. All reasonable and proper expenses,
required by the department and the Office of Consumer Counsel, including, but not
limited to, the costs associated with analysis, testing, evaluation and testimony at a
public hearing or other proceeding, shall be borne by the company and shall be paid by
the company at such times and in such manner as the department directs.
(d) The department shall not allocate any expenditures made by a gas company
pursuant to subdivision (5) of subsection (b) of this section to residential customers in
any rate schedule proceedings held pursuant to section 16-19 unless the department
finds that effective competition in the residential gas market already exists.
(e) The department shall adopt regulations to carry out the purposes of subsections
(a) and (b) of this section.
(f) Each gas, electric or electric distribution company shall conspicuously indicate
in all of its advertising whether the costs of the advertising are being paid for by the
company's shareholders, its customers or both.
(P.A. 75-588; P.A. 77-614, S. 162, 610; P.A. 79-142; P.A. 80-482, S. 58, 348; P.A. 82-150, S. 5; P.A. 83-101; P.A.
91-248, S. 8, 13; P.A. 96-13; P.A. 98-28, S. 91, 117.)
History: P.A. 77-614 replaced public utilities control authority with division of public utility control within the department of business regulation, effective January 1, 1979 (original act referred to public utilities commission which was
supplanted by the authority via P.A. 75-486); P.A. 79-142 substituted advertising by order of public utility control division
for "advertising directed at the replacement appliance market" in Subsec. (a)(4); P.A. 80-482 made division an independent
department and deleted reference to abolished department of business regulation; P.A. 82-150 deleted superfluous references to definitions in Sec. 16-1; P.A. 83-101 added Subsec. (d), requiring gas and electric companies to indicate source
of payment of advertising costs; P.A. 91-248 added Subsec. (b)(4) re marketing of efficient gas and electric equipment
and inserted a new Subsec. (c) re approval of efficient gas and electric equipment and payment of the department and
office of consumer counsel re applications, relettering former Subsecs. (c) and (d) accordingly; P.A. 96-13 added Subsec.
(b)(5) re advertising by a gas company and inserted new Subsec. (d) re allocation of expenditures made by a gas company,
relettering former Subsecs. (d) and (e) accordingly; P.A. 98-28 changed "utility" to "public service company" throughout
and amended Subsecs. (b) and (f) by adding electric distribution companies, effective July 1, 1998.