III. Procedural History

This OII continues our review of MHP submetering issues. In OII 93-10-022 we addressed the concerns of MHP tenants who alleged that they were being charged twice for repair and replacement of MHP utility systems: once through submetered utility rates paid to the MHP owner and secondly through rent increases and surcharges. That OII was limited to master-metered / submetered gas and electric service provided to MHPs by Edison, PG&E, SDG&E and SoCalGas. The OII was limited further to the single issue of whether receipt of the submetering discount bars park owners from recovering "costs of owning, operating, and maintaining a submetered system" beyond the reimbursement provided by the submetering discount.

The resulting Decision 95-02-090 added new language to submetering tariffs to prohibit MHPs from further recovery of the cost of the replacement of the submetered gas / electric system beyond those costs that the PU Code Section 739.5 requires the master meter discount to include.¹ Whether there might be other, non-statutory "costs of owning, operating and maintaining" the system was not determined but left to GRCs.

The GRC review did not occur and the unresolved issues were raised, most recently in C.00-01-017 (Hambly case), which was opened when an MHP tenant filed a complaint alleging that an MHP impermissibly passed on costs to its tenants for which it was already compensated via the discount available to the master meter customer who is the MHP owner or operator. The Commission heard the complaint and issued D.01-08-040, concluding that, consistent with D.95-08-056 and PU Code Sect. 739.5, the "utility common area costs" in question could not be passed through to tenants because they were costs recovered through the master meter discount. In the Hambly case, PG&E presented evidence on the record that the costs questioned by the complainant (costs associated with pedestals and with service to common areas) may not be costs that the MHP recovers through the master meter discount, but are instead costs that the MHP may collect from submetered tenants via rents.

In D.01-08-040, the Commission also ordered MHPs to refund rents improperly collected from tenants and, consistent with D.95-08-056, invited the MHP industry to participate in their particular utility's next GRC in order to establish whether costs related to common area plant are deemed to be included in the master-meter discount.

D.01-08-040 thus held for complainant that, since the MHP had ignored the direction of D.95-08-056 and failed to seek Commission approval to recover certain costs from submetered tenants via rents, the MHP could not pass through the costs in question. On August 9, 2002, the California Court of Appeal granted review in the Hillsboro Writ Proceeding (Decision (D.) 01-08-040); (Hillsboro Properties v. CPUC, Cal. Ct. of App. Case No. A097737); and (WMA v. CPUC, Cal. Ct. of App. Case No. A098327), and oral argument was held on January 15, 2003. In briefing to the Court and at oral argument, the Commission asserted its exclusive jurisdiction to administer and implement PU Code Sect. 739.5, to calculate the master meter discount, and to ensure that submetered tenants are not treated differently than directly metered tenants.

¹ Utilities added the following tariff language pursuant to Ordering Paragraph 4. of D.95-02-090: "Condition for Receiving Submeter Rate Discount The master-meter / submeter rate discount provided herein prohibits further recovery by mobile home park owners for the costs of owning, operating, and, maintaining the gas / electric submetered system. This prohibition also includes the cost of the replacement of the submetered gas / electric system." Rehearing was denied in D.95-08-056.