II. Background and Procedural History

This complaint concerns ten mobile home parks within the service territory of Pacific Gas & Electric Company (PG&E) citing violations of Section 739.5.² The defendant mobile home parks are master-meter customers of PG&E, and provide natural gas service on a sub-metered basis to their tenants. Pursuant to Section 739.5(a), mobile home parks must charge their tenants the same rate for natural gas service that would be applicable if the tenants were receiving service directly from PG&E. Pursuant to Section 739.5(b) defendants are prohibited from retaining natural gas rate rebates they receive from PG&E. When such rebates occur, they are required to be distributed to the accounts of the tenants based on the amount of usage incurred by each tenant during the previous monthly billing period.

On March 1, 2000, PG&E submitted Advice Letter 2218-G setting forth its plan for refunding to customers $319.6 million in overcollected revenues in the Core Fixed Cost Account (CFCA). The Refund Plan was filed in compliance with Decision (D.) 00-02-046 in PG&E's General Rate Case.

On March 31, 2000, PG&E submitted a Second Revised Refund Plan in Advice Letter 2218-G-B. The Second Revised Refund Plan removed proposed implementation costs from the total Refund Plan amount and clarified refund eligibility for former core customers. The total amount to be refunded, including interest through April 30, 2000, was $319,617,000.

PG&E began distributing gas rate refunds to customers during the May 2000 billing cycle, in accordance with its Second Revised Refund Plan. Those refunds appeared on customers' bills as the "Gas Refund Credit" (Credit). PG&E also included a bill insert in core customers' bills commencing with the start of the refund that included the following statement:

This `Gas Refund Credit' results from surplus revenues created by high customer gas use during the last two years as a result of colder than normal weather. The `Gas Refund Credit' shown on this bill is your share of a refund approved by the California Public Utilities Commission.

For master-metered customers with sub-metered accounts, the bill insert included the following additional statement:

In accordance with California Public Utilities Code Section 739.5(b), you are required to distribute to your users the refund received from PG&E. This refund is calculated for each user by determining the ratio of the user's usage to the total therms for your account during the last billing period, and then applying that percentage to the total refund amount. For any questions, call PG&E at 1-800-743-5000.

Sub-metered customers did not receive direct notification from PG&E about the Credit.

The complainants alleged that defendants received the Gas Refund Credit in their PG&E bills for either May or June 2000. The complaints further allege that defendants retained all or part of the Gas Refund Credit distributed by PG&E and did not distribute the full amount of that refund to their tenants. According to TURN and CMHRAA, the defendants violated Section 739.5 by not promptly returning the Gas Refund Credit to their sub-metered customers.

On September 21, 2000, the Commission served the defendant mobile home parks with the "Instructions to Answer." Defendants were notified that their responses were due October 21, 2000.

On October 17, 2000, TURN contacted the assigned Administrative Law Judge (ALJ) to inform her that the parties were attempting to settle the case and that the deadline for the defendants to file their answers to the complaint should therefore be extended. The ALJ granted an open-ended extension subject to a subsequent demand to answer by the ALJ.

Nearly four months passed after the ALJ granted the extension, and since no settlement had been filed, the assigned ALJ issued a Ruling on February 15, 2001, ordering the defendant mobile home parks to answer the complaint by February 26, 2001. A Prehearing Conference (PHC) was scheduled for March 9, 2001 to set a schedule for resolving the complaint.

Before the answers were due, TURN contacted the ALJ to indicate that the parties had reached a settlement. On February 28, 2001, TURN served parties with its "Notice of Stipulation Conference" which informed parties that a stipulation conference would be held during the PHC on March 9, 2001. Holding a settlement conference is required pursuant to Rule 51.1(b) of the Commission's Rules of Practice and Procedure, and parties are required to receive seven days notice of the settlement conference. Therefore, TURN's notice was timely. TURN's notice also informed defendants that the ALJ had postponed the response date for defendants, with a revised date for the response to be rescheduled at the PHC. The draft stipulation document, "Joint Motion for Commission to Adopt Stipulations of Fact and Conclude Proceedings" accompanied TURN's notice to parties.

Nine of the 10 defendant mobile home parks were represented at the PHC on March 9, 2001. One defendant, Larry Wilson, representing Hillview Mobile Home Park, was unable to attend the PHC, but FAXed a letter to the ALJ on March 6, 2001, indicating that he had reviewed the draft stipulation and was willing to sign it.

At the PHC, TURN presented the stipulation document, and the ALJ and parties suggested a few minor changes. The ALJ ordered that the stipulation be filed and served no later than March 28, 2001. If the stipulation was filed by that date, the defendants would not be required to answer the complaint. The Joint Motion for Commission to Adopt Stipulations of Fact and Conclude Proceedings, which was signed by all ten named defendant mobile home parks, was filed on March 28, 2001.