Assignment of Proceeding

Michael R. Peevey is the Assigned Commissioner and Michelle Cooke is the assigned ALJ in this proceeding.

Findings of Fact

1. Following adoption of D.93586, most utilities closed their Master Meter/Submeter Tariffs to new installations.

2. There are approximately 32,000 master meter electric customers, made up of approximately 156,000 living units.

3. There are approximately 118,000 master meter gas customers, made up of approximately 1,498,000 living units.

4. Ordering Paragraphs 2 and 3 of D.93586 explicitly limited separate utility metering requirements to new multi-unit residential structures.

5. Some utilities have interpreted "new installation" to not just include new construction, but also to encompass pre-existing multi-unit residential facilities.

6. Tenants of a Master Meter Tariff customer receive no price signals because master meter customers are prohibited from separately charging for energy costs but instead must bundle those costs in rent charges under utility Tariff Rules.

7. Section 739.5 requires that when submetering is provided by a master meter customer, the master meter customer is obligated to provide service to its tenants at a rate not to exceed the rate otherwise offered by the utility were the utility providing service to the tenant.

8. There were 81 complaints with the Commission's Consumer Affairs Branch about submetered bills received that were attributable to customers in either PG&E, SDG&E, SCE, or SoCalGas service territories over the January 2001 to January 2004 time period.

9. Based on the maximum number of additional electric living units that could be submetered of 155,000, we would expect an additional 12 complaints per year if the statistics over the 2001-2004 time period holds true.

10. Based on the maximum number of additional natural gas living units that could be submetered of 1,498,000, we would expect an additional 119 complaints per year if the statistics over the 2001-2004 time period holds true.

11. Additional complaints might occur when tenants who have never been exposed to energy prices first receive submeters and receive an energy bill.

12. The current impetus to submeter is stronger for electric service nationally than is submetering for natural gas.

13. Building managers who choose to install natural gas submeters must follow the relevant federal pipeline safety standards and local building codes and ordinances, just like any other entity that works with natural gas facilities.

Conclusions of Law

1. A master meter customer may not charge rates to a submetered tenant in excess of the rates that would otherwise be charged by the utility, consistent with Pub. Util. Code § 739.5.

2. Nothing in D.93586 appears to have required closing the Master Meter/Submeter Tariffs to pre-existing multi-unit residential buildings.

3. The Commission understood the difficulty of converting an existing building to separate utility metering and only intended for the submetering option to be eliminated for multi-unit residential facilities constructred after 1981 in D.93586.

4. "New installation" means a customer whose multi-unit residential building was constructed after the date the Master Meter/Submeter Tariff was closed.

5. A customer whose building was constructed prior to the date the Master Meter/Submeter Tariff was closed and was served as a master meter customer is eligible to convert from its Master Meter Tariff to the Master Meter/Submeter tariff.

6. Buildings originally constructed for a non-residential purpose that subsequently converted to residential use before December 1981 or without the need for a building permit on or after July 1, 1982 should be eligible to convert from their prior tariff to the existing Master Meter/Submeter Tariff.

7. Tenants of multi-unit residential buildings who are not submetered have substantially less ability to manage their energy usage than those who are submetered, and therefore submetering would be preferred to send accurate price signals.

8. The prospect of additional complaints does not impose such a burden on the Commission, the utilities, and other entities to forgo the benefits of having customers receive energy price signals.

9. The Texas Rules Applicable to Electric Service Providers and PG&E's greenbook provide common sense requirements for submeter location and testing that should be followed by building owners and managers that pursue new electric submetering as a result of this decision.

10. The existing building codes, ordinances, and federal standards establish reasonable limitations on the locations of natural gas submeters that must be followed by building owners and managers that pursue new natural gas submetering as a result of this decision.

11. Retaining existing rents, which include an allocation to cover energy costs, and then incrementally charging tenants for energy usage based on submetering the energy usage is prohibited under § 739.5 because it would allow the Master Meter/Submeter customer to charge tenants more than the utility would for energy.

12. To the extent that an existing Master Meter Tariff customer converts to the Master Meter/Submeter tariff, that customer should concurrently revise its rent that includes the provision of utilities downward to remove energy related charges for the duration of the lease.

13. The petition to intervene by BOMA should be denied.

ORDER

IT IS ORDERED that:

1. Pacific Gas and Electric Company shall file an Advice Letter to remove the language added to Schedule ES, ESL, GS, and GSL by Advice Letter 2533-G/2491-E.

2. A customer whose building was constructed prior to the date the Master Meter/Submeter Tariff was closed and was served as a master meter customer shall be eligible to convert from its Master Meter Tariff to the Master Meter/Submeter tariff.

3. Buildings originally constructed for a non-residential purpose that subsequently converted to residential use before December 1981 or without the need for a building permit on or after July 1, 1982 shall be eligible to convert from their prior tariff to the existing Master Meter/Submeter Tariff.

4. Although not required, electric and natural gas utilities may file revised Master Meter/Submetering Tariffs to formalize the interpretation of who may convert to the tariff as set forth in Ordering Paragraphs 2 and 3.

5. The Texas Rules Applicable to Electric Service Providers and PG&E's greenbook provide common sense requirements for submeter location and testing that shall be followed by building owners and managers that pursue new electric submetering as a result of this decision.

6. The existing building codes, ordinances, and federal standards establish reasonable limitations on the locations of natural gas submeters that shall be followed by building owners and managers that pursue new natural gas submetering as a result of this decision.

7. To the extent that an existing Master Meter Tariff customer converts to the Master Meter/Submeter tariff, that customer shall concurrently revise its rent that includes the provision of utilities downward to remove energy related charges for the duration of the lease consistent with Pub. Util. Code § 739.5.

8. The petition to intervene by Building Owners and Managers Associations of San Francisco and California is denied.

9. In order to allow public review and comment, pursuant to § 311(g), we extend the six-month period for consideration of the petition, consistent with § 1708.5(b)(2).

10. The petition for rulemaking by is denied.

11. Petition 04-08-038 is closed.

This order is effective today.

Dated May 26, 2005, at San Francisco, California.

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