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Texas Issues Written Order Concluding Shared Branding of AEP Retail Provider, TDUs Constitutes Joint Advertising
September 26, 2012
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Copyright 2010-
The Public Utility Commission of Texas has issued a written order denying an amendment to the retail electric provider certificate of AEP Texas Commercial & Industrial Retail Limited Partnership (d/b/a AEP Retail Energy), which AEP Retail Energy had sought to allow AEP Retail Energy to serve customers under 1 MW.
As first reported by Matters, the Commission denied the application at a meeting last month, but did not immediately issue a written order. Among other things, that left open the question of whether the Commission's action only extended to denying the sought certificate amendment, or whether any findings made in the order would implicate the existing certificate and authority of AEP Texas Commercial & Industrial Retail Limited Partnership (AEP C&I) to conduct business using its previously granted names.
In the written order, the Commission states, "The evidence reflects that AEP Retail Energy and AEP's TDUs [transmission and distribution utilities] will share not only the AEP acronym, but also AEP's distinctive red parallelogram logo when advertising and promoting AEP Retail Energy ... The Commission determines that while PURA does not categorically prohibit a regulated utility and a competitive affiliate from sharing the same or similar names, the marketing efforts of a TDU and its competitive affiliate using shared branding creates a heightened potential for causing confusion among consumers."
"The Commission finds that the sharing of identical AEP branding among AEP Retail Energy and the AEP Texas TDUs as described in this case constitutes joint advertising that will cause confusion among consumers and therefore favors AEP Retail Energy over non-affiliated REPS. Such preferential joint marketing violates both PURA § 39.157(d)(6) and P.U.C. SUBST. R. 25.272(h)(2). Consequently, the Commission denies the application," the order states.
"Because the Commission bases its decision solely on the joint promotional activities described above, it is not necessary to address the ALJ's recommendations related to whether the name AEP Retail Energy is deceptive, misleading or vague; whether the proposed use of that name constitutes an arm's length transaction, whether customers can make informed choices or are protected from unfair, misleading, or deceptive practices; or whether the applicant met all other applicable requirements in P.U.C. SUBST. R. 25.107," the order states.
In an ordering paragraph, the Commission states, "The application of AEP C&I to amend its REP Certificate No. 10033 to become an option 1 REP that provides service to all residential customers and small and medium non-residential customers for the entire state of Texas is denied."
The ordering paragraph is solely limited to the REP certificate amendment application, and not AEP Retail Energy's existing authority. A conclusion of law states, "The sharing of the AEP acronym and AEP's red parallelogram logo by both AEP Retail Energy and its affiliated TDUs as described in this case violates the prohibition in PURA § 39.157(d)(6) [and] P.U.C. SUBST. R. 25.272(h)(2) of joint advertising and promotional activities that favors a competitive affiliate" [emphasis added].
The final order also adopts the following findings of fact:
• "Even though AEP Retail Energy has never marketed to residential customers in Texas, the consumer survey conducted by AEP C&I in this proceeding shows that AEP Retail Energy ranked third highest in familiarity among 14 of the other existing retail and wires companies listed in the survey and 73% of respondents in the AEP territories claimed some level of familiarity with the business name AEP Retail Energy, identical to the percentage of survey respondents that had any familiarity with the name AEP Texas.
• "The consumer survey conducted by AEP C&I in this proceeding shows that 32% of those who live in the AEP Texas TDU service area believed that the entity named AEP Retail Energy provides transmission and distribution services.
• "The consumer survey conducted by AEP C&I in this proceeding shows that over one-third of Texas consumers believe that the company that they buy electricity from also owns, maintains, and repairs the wires that deliver the electricity to their home.
• "AEP's red parallelogram corporate logo is omnipresent in communities served by AEP Texas TDUs.
• "AEP Retail Energy and AEP's Texas TDUs will share not only the AEP acronym, but also AEP's distinctive red parallelogram logo when advertising and promoting either AEP Retail Energy or AEP's Texas TDUs.
• "AEP's red parallelogram corporate logo is used on all websites for all AEP companies.
• "Neither AEP C&I's application to amend its REP certificate nor its consumer survey conducted in this proceeding addressed AEP C&I's marketing strategy to use AEP's red parallelogram corporate logo in conjunction with the business name AEP Retail Energy.
• "The same website entry page as that used for AEP Ohio Retail Energy would be used for AEP Retail Energy if AEP C&I were allowed to use AEP Retail Energy as its business name
• "While a regulated utility and a competitive affiliate are not categorically prohibited by PURA and Commission rules from sharing the same or similar names, the marketing efforts of competitive affiliates with shared branding have a greater potential for causing confusion among consumers.
• "AEP Retail Energy and the AEP Texas TDUs sharing of identical AEP branding is joint promotion that will cause confusion among consumers and result in favoring AEP Retail Energy over non-affiliated REPS.
Docket: 39509
Copyright 2010-
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