Discussion

The Commission may entertain complaints against public utilities where such complaints set forth "any act or thing done or omitted to be done ... in violation, or claimed to be in violation of, any provision of law or of any order or rule of the Commission." (§ 1702.) Absent such a claim, the complaint is not properly before the Commission and should be dismissed.

Count 1: Obstruction/Interference with Charter City's Authority to Provide Water/Utility Services

In this count, the City stated that it has the sole authority to make and enforce all laws relating to municipal affairs, and that the Commission cannot regulate, supervise, or otherwise interfere with a municipal utility. The City argued that by charging Commission-approved rates, which were in direct conflict with the City's rate schedules, MHC would be obstructing or interfering with the City's right to conduct its municipal affairs.

Although less than clearly stated, the City appeared to be challenging the Commission's right to set rates for a certificated water utility. This Commission's jurisdiction over issuing Certificates of Public Convenience and Necessity (CPCN) to public utilities, and establishing their rates, is exclusive. See Cal. Const., Art. XII, § 6; Public Utilities Code, §§ 454, 1001. In D.98-12-077, we exercised that jurisdiction and granted MHC a CPCN and approved its rates. Because the California Constitution and the Public Utilities Code vest exclusive authority for such acts in this Commission, the City may not alter our decision.

Conversely, this Commission has no authority over the rates and terms and conditions of sales of water and sewer services by the City. County of Inyo v. Public Utilities Commission, (1980) 26 Cal.3d 154, 166. The City, however, must comply with all applicable state and federal law when setting those rates. This Commission is not the tribunal that determines what state or federal law may require with respect to the City's water and sewer services.

The City's argument is correct in that insofar as the service territory of MHC constitutes former service territory of the City's municipal water and sewer department, the Commission-approved rates do interfere with the exercise of municipal power. Such interference, however, is sanctioned by the constitutional and statutory authorities cited above. Moreover, as a Commission-certificated water utility, MHC may only charge rates that have been approved by the Commission.

The City also alleged that the continuation of MHC's CPCN is not necessary or convenient to the public for the following reasons:

1. adequate water and sewer services have been provided to the park residents at lower rates by the City;

2. rate protection for the residents is already provided through City ordinances and regulations;

3. MHC could not provide water and sewer services without the City-provided water and sewer treatment facilities;

4. MHC has no plant or capitalization of its own but is merely a paper shell corporation that was created solely for the purpose of elevating rates and profits for MHC; and

5. Park residents will continue to receive the same water and sewer services at lower rates than approved by the CPUC if MHC's CPCN is revoked.

These five statements do not allege a violation of state law or Commission regulation, as required by § 1702 to form the basis for a complaint. Whether the City might provide service at a lower rate, subject to rate protection from City ordinances, would not constitute a violation, even if proven. MHC's dependence on resale of the City's water and sewer services violates no statute or regulation, so long as MHC continues to provide adequate service to its customers, as required by § 451. MHC's plant and capitalization were addressed in D.98-12-077 and found to be sufficient. The City alleged no facts or developments since that decision that call into question the earlier determination.

In sum, Count 1 alleges interference with municipal authority due to MHC's Commission-approved rates being applicable within MHC's service territory rather than the City's. Such interference, however, violates no statute or regulation and, indeed, is directly contemplated by state law. The City's other allegations under this count similarly fail to describe a violation. Accordingly, Count 1 is properly dismissed for failure to state claim upon which relief can be granted.

Count 2: Interference with Municipal Police Powers

In this count, the City alleges that efforts by MHC to impose the Commission-approved water rates is a violation of the City's rent control ordinance and thereby interferes with the City's enforcement of its police powers.

As noted above, the Commission has exclusive authority to approve rates for certificated water companies, such as MHC. No statutes or regulations prevent this Commission from approving rates that are different from the rates that would be charged by MHC pursuant to the rent control ordinance. MHC's compliance with the Commission's order setting MHC's rates is required by §§ 451 and 454. Such compliance, however, even if it renders MHC's rates inconsistent with those that would be charged pursuant to the rent control ordinance, is not a violation of a statute or regulation. Accordingly, the City has failed to allege in Count 2 a violation of a statute or regulation upon which relief can be granted pursuant to § 1702, and Count 2 should be dismissed.

Count 3: Miscellaneous Allegations

In its third count, the City argued that several MHC acts warrant revocation of the CPCN. We will address each act separately.

The City alleged that MHC made factual misrepresentations in the proceeding that resulted in D.98-12-077, and that MHC failed to acquire the consent of the City as required by § 1004 prior to the issuance of that decision. These issues would have been properly raised in an application for rehearing of D.98-12-077.³ Pursuant to § 1731, such applications must be filed within 30 days of the date of issuance of the order. That time period having long expired, such an application would no longer be accepted.

The City next alleged that MHC attempted to collect its Commission-approved rates prior to applying to the City for resale approval as was required by D.98-12-077. The decision, however, imposes no such requirement. Of course, MHC must provide its customers with adequate and efficient service, as required by § 451. The City has not alleged that MHC is failing to provide such service. Accordingly, no alleged violation of a statute or regulation is apparent from the City's statements.

The City contended that MHC attempted to collect Commission-approved water and sewer rates without the use of separate billings in the name and style of the water and sewer corporation. The City cited no explicit requirement for separate billing. MHC responded that it is in full compliance with all Commission billing regulations but that it did, for a time, include the charges for water and sewer on rent bills. Such combined billings, however, have ceased. The City has not alleged any harm to customers from this billing, nor has the City cited to any Commission precedent finding that an error of this type could be grounds for the relief sought by the City. Accordingly, this allegation fails to state a claim upon which relief can be granted.

The City next contended that MHC misapplied a 7% City user tax, and retained most of the proceeds rather than paying the funds over to the City. MHC is, of course, required to bill accurately all rates and charges set out in its tariffs. The proper billing of a City-imposed user tax is a matter for the City to enforce, consistent with its ordinances and authority.

The City's final allegation -- that MHC sought review of the City's decision denying MHC water resale authority in federal court, rather than a readily available state court forum, so as to unreasonably burden the City - fails to identify any law or regulation directing that MHC must litigate in any particular court. This allegation, like the other factual allegations in Count 3, fails to meet the requirements of § 1702. Therefore, Count 3 should be dismissed.

In conclusion, we have carefully considered each allegation made by the City. The City has not alleged that MHC has committed "any act or thing done or omitted to be done ... in violation, or claimed to be in violation of, any provision of law or of any order or rule of the Commission." Consequently, we find that the City has failed to state a claim upon which relief can be granted under § 1702, and that this complaint should be dismissed.