ALJ/JPO/eap Mailed 4/22/05
Decision 05-04-041 April 21, 2005
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's Own Motion to Re-Examine the Underlying Issues Involved in the Submetering Discount for Mobile Home Parks and to Stay D.01-08-040. |
Rulemaking 03-03-017 (Filed March 13, 2003) |
Order Instituting Investigation on the Commission's Own Motion to Re-Examine the Underlying Issues Involved in the Submetering Discount for Mobile Home Parks and to Stay D.01-08-040. |
Investigation 03-03-018 (Filed March 13, 2003) |
OPINION GRANTING INTERVENOR COMPENSATION
TO THE UTILITY REFORM NETWORK FOR SUBSTANTIAL
CONTRIBUTIONS TO DECISION 04-04-043 AND DECISION 04-11-033
This decision awards The Utility Reform Network (TURN) $101,093.04 in compensation for its contribution to Decision (D.) 04-04-043 and D. 04-11-033.
I. Background
A large number of mobilehome park (MHP) owners provide electricity and/or natural gas to their tenants through a master-meter.1 In such cases, the MHP owner receives electricity and/or natural gas from the utility at a master-meter. The electricity and/or natural gas is then distributed to tenants through the MHP owner's distribution system, and a submeter located at each tenant's mobilehome. Each tenant is billed by the MHP owner for the usage recorded by the submeter.
Pub. Util. Code § 739.5 provides in pertinent part:2
"739.5. (a) The commission shall require that, whenever gas or electric service, or both, is provided by a master-meter customer to users who are tenants of a mobilehome park..., the master-meter customer shall charge each user of the service at the same rate which would be applicable if the user were receiving gas or electricity, or both, directly from the gas or electrical corporation. The commission shall require the corporation furnishing service to the master-meter customer to establish uniform rates for master-meter service at a level which will provide a sufficient differential to cover the reasonable average costs to master-meter customers of providing submeter service, except that these costs shall not exceed the average cost that the corporation would have incurred in providing comparable services directly to the users of the service.
(b) Every master-meter customer of a gas or electrical corporation subject to subdivision (a) who, on or after January 1, 1978, receives any rebate from the corporation shall distribute to, or credit to the account of, each current user served by the master-meter customer that portion of the rebate which the amount of gas or electricity, or both, consumed by the user during the last billing period bears to the total amount furnished by the corporation to the master-meter customer during that period."
Section 739.5 requires MHP owners to charge the same rates for electricity and natural gas that would be applicable if the utility served the tenant directly. The utilities are required to provide the electricity and natural gas to the MHP owner at a discount. The discount is intended to reimburse the MHP owner for the reasonable average cost of providing submetered service. The discount is not to exceed the average cost that the utility would have incurred in providing comparable services to the tenant directly, which is avoided when the MHP is submetered.
In Rulemaking (R.) 03-03-017 and Investigation (I.) 03-03-018, the Commission planned to answer the following questions:
1. What are the components of the cost to a utility of directly serving MHP tenants, not already identified in D.95-02-090 and D.95-08-056, and which of them does a utility avoid if a MHP submeters its tenants?
2. Can the Commission set a uniform statewide rate structure and method to calculate the discount, and if so what cost figures or other issues of fact in dispute can parties present to resolve them?
3. Should the Commission revise the refunds ordered in D.01-08-040?
4. What mechanism should be implemented to ensure refunds, ordered in D.01-08-040, are appropriately made to MHP tenants?
5. Should the Commission explore beyond the conclusions reached in D.95-08-056 a fair and reasonable way to mitigate the cost to MHP owners of converting existing submetered systems to directly-metered service?
6. Should the Commission revise the methods and formulas by which refunds are currently paid to tenants by MHP owners?
The first question was addressed in D.04-04-043, in Phase 1 of this proceeding.
D.01-08-040 (reference in the third and fourth questions) was issued in Case (C.) 00-01-017, a complaint by MHP tenants alleging that a MHP owner violated § 739.5(a). The Commission found that the tenants' allegation was correct, and ordered refunds. At the time this proceeding was initiated, the issue of the refunds remained outstanding, and C.00-01-017 was consolidated with this proceeding. Subsequently, the parties in C.00-01-017 resolved the remaining issues among themselves, and asked the Commission to close the proceeding. By D.04-06-007, C.00-01-017 was separated from this proceeding and closed. Therefore, the third and fourth questions were resolved by the parties to C.00-01-017.
The Commission addressed threshold issues, and then addressed the remaining questions that were rewritten and organized as follows:
1. Should the Commission adopt a uniform statewide rate structure for the discount?
2. Should the Commission adopt a uniform statewide method to calculate the discount?
3. Are there fair and reasonable ways to mitigate the cost to MHP owners of converting existing submetered systems to directly-metered service?
4. Should the Commission revise the methods and formulas by which refunds are currently paid to submetered tenants by MHP owners?
5. Are there requirements that should be placed on MHP owners to ensure that the discounts are used to pay for the intended expenditures, to facilitate gathering data to be used in determining the MHP owners'costs in setting the discount rate, or for some other purposes?
In D.04-04-043, an interim decision, the Commission adopted the unopposed joint recommendation of seven of the parties. The joint recommendation identified the categories of costs the electric and natural gas utilities incur when directly serving MHP tenants that are avoided by the utilities when the MHP is served through a distribution system owned by the MHP owner. These categories of costs are to be used in determining the amount of the discount provided by the utility to the submetered MHP owner as reimbursement for the cost of providing submetered service. The joint recommendation also identified categories of costs that are either not incurred by the utility when it directly serves MHP tenants, or are not reflected in utility rates for direct service. However, these costs are incurred by submetered MHP owners and may be separately charged to tenants if not otherwise prohibited.
Decision 04-11-033 was the final decision in this proceeding. It adopted the following requirements, and closed the proceeding.
1. The discount shall be set at the average cost that the utility would have incurred in providing comparable services to the tenant directly, which is avoided when the MHP is submetered.
2. The discount shall be determined in a general rate case, biennial cost allocation proceeding, or similar proceeding where the utility's revenue requirement and rates are set (revenue requirement proceeding). Between such proceedings, the utilities shall include a proposed revision to the discount in any utility filing proposing a revision to residential rates if the change in residential rates, or the data upon which the residential rate change is based, is sufficient to change the discount.
3. Any proposed settlement or stipulation in a revenue requirement proceeding, if the settlement or stipulation includes the discount, shall specify whether and how the discount is to be adjusted between such proceedings.
4. If the calculation of the discount and how the discount is to be adjusted between such proceedings is not specified in an adopted settlement or stipulation that includes the discount, the discount shall not be revised until the next such proceeding.
5. In any proceeding where the parties propose a settlement or stipulation that includes the discount, they shall specifically demonstrate that the proposed discount complies with § 739.5.
6. The discount shall be set as an amount per space per day.
7. The discount shall be calculated using a sampling method based on a statistically valid random sample, or using a marginal cost method. The specifics of any sampling or marginal cost method shall be addressed in the revenue requirement proceeding where the discount is set.
8. Refunds shall be distributed to tenants pursuant to § 739.5(b), except that when the refunds by the utility are on a per-meter basis, the refunds to the tenants shall be on a per-submeter basis.
9. Whenever a utility issues a refund to MHP owners through a reduction in the utility bill that should be distributed to tenants, the utilities shall: (1) identify the refund amount on the bill, and (2) explain how tenant refunds are to be calculated. If refunds are issued to MHP owners other than through the bill, the utilities shall identify the refund as such, and explain how to calculate tenant refunds.
10. For special programs for which the above tenant refund distribution methodology would not be appropriate, the tenant refund distribution methodology shall be addressed in the proceeding in which the special program is authorized.
11. When a tenant of a submetered MHP contacts a utility concerning the bill provided to the tenant by the MHP owner for electricity and/or natural gas, the utility shall at a minimum offer to provide information on how it calculates its bills, since the MHP owner is required to calculate tenant bills in the same manner, and on eligibility for programs for which the tenant may be eligible such as the California Alternate Rates for Energy (CARE) program. The utility shall also refer the tenant to the Commission's Consumer Affairs Branch, for resolution of complaints.
12. In their next revenue requirement proceedings, the utilities shall provide an analysis of the costs, benefits, and feasibility of providing bill calculation services to MHP owners. The utilities shall also provide examples of the appropriate tariff language, and an estimate of the rates necessary to recover the full costs of such services from the MHP owners.
13. The motion, filed by the active parties on January 16, 2004, to establish a new proceeding to consider the issue of whether there are fair and reasonable ways to mitigate the cost to MHP owners of converting existing submetered systems to directly-metered service, is denied.
1 MHP owners, as the term is used herein, are also referred to as "master-meter customers." A MHP served through a master-meter that serves tenants through submeters is referred to as a submetered MHP.
2 All section references are to the Public Utilities Code unless otherwise indicated.
