(1)    Protected speech:  The utilities’ promotion advertising was
clearly protected under the First Am.  The Court rejected the arg
that ads by a monopolist had no value; for one thing, even a
monopolistic electric utility faces competition from alternative
energy sources.
(2)    State interests: The state asserted two interests in support
of its ban: Conservation of energy and maintenance of a fair and
efficient rate structure (which, the state contended, would have been
impaired by an increase in usage, because of the peculiarities of the
rate structure.) The Court agreed that each of these interests was
substantial.
(3)  Direct link: The Court found that there was a direct link
between the ban and
one (but not the other) of the asserted state interests, that of
energy conservation.
(The link between promotional advertising and inequitable rates was,
by contrast, too speculative to satisfy the “direct link”
requirement.)
(4)     Least-restrictive alternative: With respect to the ban as a
way of promoting
energy conservation, part (iv) was not satisfied; the ban was more
extensive than
needed to further that interest. For instance, it prevented a utility
from promoting
the use of electricity even for those applications (i.e., a heat
pump) where it was a more efficient power source than that currently
being used.  To narrow its ban, the Commission could attempt to
restrict the format and content of the utilities’ advertising.  It
might, for example, require that the ads include info. about the
relative efficiency and expense of the offered service, both under
current conditions and the foreseeable future.  Also, the CPS may
preview promotional ads to insure that they will not defeat the
conservation policy before releasing the ads (as the CPS has already
done with “informational ads”), since traditional prior restraint
doctrine may not apply to commercial speech.