October 5, 2006

OLYMPIA – The staff of the Washington Utilities and Transportation Commission (UTC) and Puget Sound Energy (PSE) reached a settlement today in which the utility has agreed to pay $700,000 in penalties for violating state customer privacy rules.

The proposed settlement must be approved by the commission before taking effect.

In the settlement, PSE acknowledged transferring more than 65,000 calls over a five-year period from new and relocating customers as well as certain customer information to an outside marketing firm without the customers’ written permission between November 2001 and March 2006.

State regulations prohibit privately-owned energy utilities, such as PSE, from releasing or selling customer information to any outside party for marketing purposes without the customer’s written permission.

In March 2006, the UTC began an investigation into a report that PSE call center employees were transferring some customer calls and information to Allconnect, a Georgia-based marketing company. Known as PSE Connections, the program marketed household services, such as telephone, newspaper and lawn services, to PSE’s residential customers.

PSE received a commission for transferring these residential customers to Allconnect. After PSE transferred a call and customer information, Allconnect would confirm the service order and then market the additional services.

In March 2006, PSE immediately stopped the program pending the outcome of the investigation. Under the settlement, the company will terminate the program permanently.

If the proposed settlement is approved by the three-member commission, in addition to the $700,000 fine, PSE will donate $95,000 – an amount equal to the revenue from the program - to the Warm Home Fund. The company also has agreed to provide written notice to its residential customers of their privacy rights.

Bellevue-based PSE provides service to more than 1 million electric and 700,000 natural gas customers living in 11 Washington counties: King, Pierce, Jefferson, Island, Kitsap, Kittitas, Lewis, Skagit, Snohomish, Thurston and Whatcom.

The UTC is the state agency in charge of regulating the private, investor-owned natural-gas and electric utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing these companies the opportunity to earn a fair profit.

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Staff Investigation Report
Staff Complaint
UTC Staff & PSE Proposed Settlement