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SYNOPSIS: Once Web 2.0 luddites, more and more utilities are now adopting social media. Whether it's a company profile and job postings on LinkedIn, a Facebook page with tips about energy efficiency, or a Twitter stream disseminating information about recent outages, utilities are undeniably serious about adding digital real estate to their service territory.
Yet even as the utility march towards Web 2.0 gathers momentum, the heavily regulated nature of the utility industry presents challenges in the naturally free-flowing world of social media. In addition to the traditional issues that all businesses face when engaging social media - from workplace concerns related to employee abuses of social media and appropriate discipline to copyright and IP protection - utilities must also ensure that their participation in social media does not run afoul of affiliate codes of conduct, SEC regulation, and a host of other compliance issues. This article provides an exhaustive summary of the legal and regulatory issues potentially implicated by utility engagement in social media, and proposes best practices and guidelines for development of a social media policy that reduce the risks of social media for utilities.
THE POWER OF SOCIAL MEDIA
Increasingly, utilities are harnessing the power of social media for a variety of business purposes, including educating consumers, implementing regulatory initiatives like demand response and smart grid, coordinating stakeholder proceedings, and communicating power outages and safety issues to the public. Yet even as utilities hop aboard the social media bandwagon, they remain subject to the same regulatory and legal requirements that apply to their traditional activities. Though social media changes the media for communicating with consumers or carrying out a required function, it does not change the message. Thus, commonly prohibited activity like utility endorsement of an affiliate is not transformed into permissible conduct merely because that endorsement comes in the form of a 140-character tweet.
This article describes the regulatory and legal issues potentially triggered by a utility's use of social media. Part I briefly defines what social media is, and describes the ways that utilities currently use social media. Part II describes the distinct legal issues triggered by utility use of social media from the perspective of the utility as (1) an employer, (2) a corporate entity, (3) a...