IV. Discussion

A. Master-Metered Mobile Home Parks

Prior to January 1, 1997, mobile home parks had the option of installing privately owned distribution systems and services within their mobile home parks. For example, electric services would be installed from the utility's electric distribution facilities to an acceptable location at the mobile home park, usually at the park perimeter. This would be the location of the utility owned master-meter for the mobile home park. The master-meter is where the utility's electric service would end and the mobile home park distribution system and services would start.

Residents of mobile home parks and manufactured housing communities constructed after January 1, 1997, are individually metered and served by electric and gas utilities. (See Pub. Util. Code § 2791.) Owners of master-metered mobile home parks may also elect to transfer ownership and operational responsibility for providing electric or gas service to the electric or gas utility providing service in the area. (Id.)

Colony operates Colony Park as a master-metered mobile home park. Edison brings its service to a master-meter located in the park, and Edison's responsibility ends at the master-meter. Colony owns and operates its own gas and electric service and is responsible for bringing those services from the master-meter to the mobile home park residents.

Pursuant to Pub. Util. Code § 739.5, mobile home park owners who elect to operate a master-metered system receive a master-meter discount from the utility for the costs of owning, operating, and maintaining their electric or gas submetered system. Because of this discount, mobile home park owners are prohibited from further recovery of costs for the above-listed responsibilities, as well as the cost of replacing the submetered system. (See Re Rates, Charges, and Practices of Electric and Gas Utilities Providing Services to Master-Metered Mobile Home Parks, D.95-02-090, 58 CPUC2d 709, 721, Ordering Paragraph 4.) The Commission has construed Pub. Util. Code § 739.5 to require that tenants at master-metered mobile home parks pay no more than if they were receiving the service directly from the utility. (See Steiner v. Palm Springs Mobile Home Properties, D.97-07-009, 73 CPUC2d 369, 373; see also D.95-02-090, 58 CPUC2d 709.)

B. The Purpose of Revenue-Based Allowances

In its decision approving various line extension rules of electric and gas utilities, the Commission has discussed the purpose behind revenue-based allowances:

"Revenue-based allowances (supported by applicant revenues) for both gas and electric line extensions provide an equitable arrangement between the applicant and ratepayer, as well as between various classes of applicants. The revenue-based allowances which represent the utility investment are based on the expected supporting revenues from the loads to be served by the extension. This amount is then used as the allowance, and is credited to the applicant's total cost for the extension. The allowance is stated in dollars in order to maintain consistency among and between a large variety of applicants." (Re Line Extension Rules of Electric and Gas Utilities, D.94-12-026, 58 CPUC2d 1, 73, n. 2.)

Thus, the general concept underlying allowances is that they be tied to new sources of revenues to ensure that the ratepayer-funded expenses (to the amount of the allowance) are justified.

C. Edison

1. Rule 16

a) Applicability

Rule 16 concerns service extensions. It is applicable to both (1) Edison service facilities that extend from Edison's distribution line facilities to the service delivery point, and (2) service related equipment required of applicant on applicant's premises to receive electric service. (Rule 16, Applicability.)

Rule 16.A.2 defines service facilities as consisting of primary or secondary underground or overhead service conductors, poles to support overhead service conductors, and other Edison-owned service related equipment. Rule 16.H defines a service extension as the "overhead and underground primary or secondary facilities...extending from the point of connection at the Distribution Line to the Service Delivery Point." Rule 16.H defines the service delivery point as where Edison connects its conductors to the applicant's conductors (typically where the customer's meter is located).

Colony is solely served by Edison transformers, service and meter on Colony's premises. Colony's requested upgrade is a Rule 16 service extension because the entire requested work will take place on Colony's premises and will serve one customer, Colony.²

b) Service Rearrangement

Rule 16.F.1, governing service reinforcements, states that when Edison "determines that its existing service facilities require replacement, the existing service facilities shall be replaced as a new service extension" under Rule 16. According to Edison, examples of a service reinforcement include requests that Edison replace its existing transformer and service due to additional load (new homes, room additions, new equipment) or circumstances where Edison deems replacement of transformers is necessary due to added load within the area. Under a reinforcement, the customer may be granted an allowance if it meets the criteria of Rule 15.³

Rule 16.F.2 governs a service relocation or rearrangement and states in relevant part:

"b. Applicant convenience. Any relocation or rearrangement of SCE's existing Service Facilities at the request of Applicant (aesthetics, building additions, remodeling, etc.) and agreed upon by SCE shall be performed in accordance with Section D above except that Applicant shall pay SCE its total estimated costs."

Colony is requesting that Edison enhance the electric service by increasing the voltage service to Colony's tenants. These enhancements include installing a three-phase transformer instead of a single-phased transformer and increasing the capabilities of transformers and associated work to bring the enhanced electrical service to the master-meter serving Colony Park.

Under the above tariffs, Edison makes the determination whether the requested work is a service reinforcement or service rearrangement. In its testimony and in its briefs, Edison determined that Colony's request is a service rearrangement because Edison has not determined that any upgrade or modification to its existing equipment is required to maintain service to Colony.⁴ As such, Edison states that Colony's request is a service rearrangement for Colony's convenience governed by Rule 16.F.2.b, and that Colony is responsible for the total cost of this rearrangement. Edison bases its conclusion, in part, on its own determination under its planning guidelines that Edison's equipment is sufficient to handle Colony's existing load and about 33% additional load before Edison would be required to upgrade its system.

Edison did not err in determining that Rule 16.F.2.b applies here. Under complainants' own admission, Edison's existing service facilities would not likely reach their capacity for at least five more years. Thus, Colony's requested enhancement is not a service reinforcement under Rule 16.F.1, because there is no evidence that the existing facilities require replacement at this time.

Complainants argue that Edison erred in determining that Colony's requested enhancement is not needed. They specifically disagree with Edison's interpretation of its rules as requiring the new load to occur within six months.⁵ Although complainants recognize that the rules regarding allowances should give ratepayers some certainty that the load will come on line, they argue that there is no Commission mandate that complete certainty be provided, or that the load materialize within a defined period of time.

In essence, complainants argue that under the tariffs they, and not the utility, should be the arbiters of determining need for the enhancement. However, Rule 16.F.1 gives Edison that discretion, and we determine that Edison did not err in interpreting Rule 16.F.1. Complainants have not met their burden in demonstrating that Edison needs to replace Colony's transformer and make other enhancements now, in that complainants have admitted that Edison's existing service facilities would not likely reach their capacity for at least five more years.

Complainants argue that the requested work is also necessary to address voltage drops at Colony Park and to assist Colony in complying with the state housing code. However, these are operational and maintenance issues for Colony on its side of the meter, and do not necessarily require Edison to upgrade the system on its side of the meter. Edison is not required to comply with the state housing code or to assist Colony in so doing. Unless actual demand at Colony is near the capacity of Edison's existing service facilities, Edison's conclusion that its system does not have to be upgraded at this time is reasonable. Edison is not responsible for solving Colony's voltage support problems on Colony's side of the meter; moreover, Edison testified that Colony has other options available to resolve these problems.

Complainants also argue that even if rule 16.F.2.b applies, Colony should be eligible for allowances. Complainants argue that although Rule 16.F.2.b states that "applicant shall pay SCE its total estimated costs," this section only defines who pays, but does not address the issue of whether line extension allowances are applicable to that cost.

We disagree. The plain language of Rule 16.F.2.b states that applicant shall pay Edison its total estimated costs. If the intent of this rule were otherwise, it would say so. (See, e.g., Rule F.1.a, stating that facilities shall be replaced as a new service extension "under the provisions of this Rule." Allowances are applied to new service extensions, under the provisions of Rule 16.)

2. Complainants' Other Arguments

a) Rule 15

Complainant also argue that Rule 15, concerning distribution line extensions, rather then Rule 16, concerning service extensions, is applicable to this case because the new transformer is providing service to numerous residential master-metered customers who reside within the park. Complainants believe that past Commission decisions concerning the treatment of mobile home park residents support this view.

We disagree. As stated above, the customer in this case is Colony, not the master-metered residents whom Colony serves. Therefore, Rule 16, and not Rule 15, is applicable here. Moreover, as described above, past Commission decisions hold only that residents of master-metered mobile home parks should not be required to pay higher rates and charges than residents of mobile home parks that are individually metered by the utility. (See Steiner, supra.) Steiner does not broadly hold that the same proposition applies to the mobile home park itself, and thus does not support Colony's argument. In fact, there are important differences between master-metered and directly-metered parks. For example, in master-metered parks, the park owner owns and operates its own gas and electric service and is responsible for bringing those services from the master-meter to the mobile home park residents. Mobile home park owners who elect to operate a master-metered system receive a master-meter discount from the utility for the costs of owning, operating, and maintaining their electric or gas submetered system. In directly-metered parks, the utility (such as Edison) serves the park residents, and they are the utility's customers not the park's.

b) Allowances

Assuming for the sake of argument that either Rule 16.F.1 or Rule 15 were applicable here (we find above that they are not), Colony still would not be entitled to any allowances.

Rule 15.C governs the eligibility of allowances not only for service subject to Rule 15, but also for service subject to Rule 16.⁶ Edison's Rule 15.C states in pertinent part:

"1. GENERAL. SCE will complete a distribution line extension without charge provided SCE's total estimated installed cost does not exceed the allowances from permanent, bona-fide loads to be served by the distribution line extension within a reasonable time, as determined by SCE. The allowance will first be applied to the service extension in accordance with Rule 16. Any excess allowance will be applied to the distribution line extension to which the service extension is connected.

"2. Basis of Allowances. Allowances shall be granted to an applicant for permanent service, or to an applicant for a subdivision or development under the following conditions:

a. SCE is provided evidence that construction will proceed promptly and financing is adequate, and

b. Applicant has submitted evidence of building permit(s) or fully-executed home purchase contract(s) or lease agreement(s), or

c. Where there is equivalent evidence of occupancy or electric usage satisfactory to Edison."

Under Rule 15.C.1, new load must be added within a reasonable time, as determined by Edison, to qualify for the allowances. For residential subdivisions, that period of time is defined by Rule 15.D.7 as six months, because if new load does not materialize within six months, Rule 15.D.7 requires that the customer be billed for the difference between the allowances received and those based on the revenue actually generated. These time limitations are reasonable because allowances represent the portion of the costs of line extension that the Commission has decided is appropriate to charge to the ratepayers under the assumption that this amount will be supported by future revenues.

As stated above, complainants have not met their burden of proof that the new load will be added within a reasonable period of time. They have admitted that Edison's existing system is sufficient to handle the current load and the load anticipated for about five more years. Therefore, Colony would not qualify for any allowances under Rule 15.

Colony argues that it has met the criteria of Rule 15.C.2.a that construction will proceed promptly because it has begun to upgrade portions of the park that will interconnect with the work to be performed by Edison. We do not agree. Colony has not addressed construction of the new buildings or additions related to the new load that will be added.

3. Miscellaneous Arguments

Edison's planners initially concluded that Colony was entitled to some allowances, as demonstrated by its billing the park only $279.40. Less than a month later, Edison corrected its conclusion. The fact that Edison initially erred in its determination does not persuade us to interpret the tariffs differently than we do today.

Colony also argues that because of the age of the park and the service equipment, the equipment should be upgraded. However, Tariff Rule 16 does not base the determination of whether the system should be replaced on its age; rather, the system's adequacy to handle existing and anticipated load is, appropriately, the determining factor.

In summary, we find that Edison's Tariff Rule 16 is applicable to Colony's request as to Edison, and that Edison did not violate this tariff in determining that no allowances are available to Colony. We therefore deny the complaint against Edison.

D. PG&E

Complainants' testimony with respect to PG&E consists of the following paragraph sponsored by Walter Lane of Subsurface Electric:

"Until the fall of 2002, I was unaware of any cost increases due to discontinuance of allowances [with PG&E] as with Colony's situation with Edison. Subsurface Electric is in the process of completing two small parks in West Sacramento and I have been informed by the owner that they have paid PG&E more than $74,000 in fees that would normally have been offset by PG&E's residential allowances. This amount is over $1,000 per space just for PG&E's services. We are also working on a mobile home park in Sunnyvale, also in PGE&'s service territory, but have been unable to get cost estimates from PG&E at this time. I can provide supplemental testimony when that information is obtained." (Exhibit 2 at 9.)

Lane did not review the customer's final application, did not have any discussions with PG&E regarding the project, and was unaware whether the customer asserts any claims against PG&E. We agree with PG&E that complainants have failed to state a cause of action against PG&E because the testimony against PG&E is not specific enough to establish a tariff violation. We therefore dismiss the complaint as to PG&E.