UPLC: CALIFORNIA REMOVES REGULATORY BARRIERS TO BPL

The California Public Utilities Commission has issued an “Opinion Implementing Policy on Broadband over Power Lines” which, among other things, gives California utilities the option of providing BPL through an unregulated affiliate, and generally exempts BPL transactions from requiring prior approval by the PUC. The decision is remarkable for its regulatory restraint and progressive policymaking, recognizing repeatedly that overregulation could discourage the deployment of BPL in California altogether. The PUC was open to the possibility that a regulated utility could offer BPL itself, although it would require approval from the PUC. The PUC clarified that it would apply rules for telecom, rather than energy affiliates, in reviewing BPL transactions. Meanwhile, the PUC established policies that protect ratepayers and align shareholder risks and rewards by requiring shareholders to pay for the deployment and by limiting ratepayers’ investment only to R&D or operational costs associated with utility applications.

To provide incentives for shareholders to deploy BPL, the PUC authorized negotiated access fees and established two different revenue sharing arrangements with ratepayers. While the PUC decided to require utilities to provide nondiscriminatory access to poles and rights-of-way; it did not require mandatory access. As for rates for BPL attachments, the PUC approved a cost-based methodology proposed by SDG&E. The main issue before the PUC was an exemption from review and approval of BPL transactions; and not only did the PUC grant the exemption, it also refused to impose additional conditions on BPL transactions, such as environmental review, and it refused to require PUC approval of BPL contracts. For more information on the California BPL Opinion, contact the UPLC Legal/Regulatory Department.