Sec. 16-19d. Advertising not to be deemed an operating expense for purposes of rate-making. Disclosure of source of payment for advertising. - Connecticut Statutes

      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.