IV. Preliminary Scoping Memo
A. Issues
Decision (D.) 01-08-040 should be stayed and consolidated with this OII/OIR because:
1. The Commission has not, but should, define and quantify any average costs, not already identified in D.95-02-090 and D.95-08-056, avoided by jurisdictional electric and gas utilities when serving MHPs that submeter electricity or gas used by their tenant residents;
2. MHP owners have not been given the promised opportunity through the GRC process to litigate whether any non-statutory avoided costs exist that should be recovered from MHP tenants in rent because they are not included within the MHP master meter discount; and because
3. Any refunds due tenants from MHPs if ordered through GRCs might constitute prohibited retroactive ratemaking but where warranted could be ordered through an OII/OIR process.
The Commission plans to answer the following questions as described further below:
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 master meter 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 submetered 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?
The first and central issue of this proceeding (Phase 1) is to identify, among all utility-related costs of operating an MHP, those costs, not already identified in prior Commission decisions that are avoided by a utility serving an MHP, when the MHP submeters its tenants. Costs identified and defined as not being incurred by the utility in MHPs that it meters directly, will emerge as costs that MHP operators will be legally entitled to pass through to their tenants, subject to the oversight and discretion of local rent control boards, where applicable. Examples of cost categories that we will address include: meter reading and billing, capital improvement and associated maintenance, repair and replacement for common areas, lighting, appliance energy, pedestals, and service drops. In Phase 1 we will define cost components and categories as a matter of policy.
PU Code Section 739.5 precludes the use of costs in excess of those that would be incurred by the serving utility in providing comparable service (D.89907, 1 C.P.U.C.2d 172, 179), but only bars from further recovery those capital improvement costs that relate to the submetered system and that are costs factored into the master meter discount. (D.95-08-056, 61 C.P.U.C.2d 225, 229.) We will determine which costs are not factored into the master meter discount.
The second reason for opening this OII (Phase 2) is to explore setting a uniform rate structure and method to calculate the master meter discount, and to establish a statewide discount if possible. In Phase 2, depending on factors including developments in current GRCs for PG&E and Edison, we may quantify the amount of the master meter discount. We will consider adopting a fixed discount per dwelling unit per day applicable to all jurisdictional utilities throughout the state.
A third reason for establishing this proceeding is to clarify what refunds are due tenants in C.00-01-017, the Hambly case, and to develop a mechanism to ensure refunds are appropriately made to submetered tenants. In D.01-08-040, the Commission ordered the parties to meet and confer to calculate refunds for excess rents charged to tenants via the improper operation of the NOI (net operating income) rent control formula, and for trenching, conduit and pedestal costs. In this OII/OIR, the Commission does not intend to revisit the issue of rent increases authorized pursuant to the NOI formula. The Commission does intend to re-examine the trenching, conduit and pedestal costs, and to that extent any refunds ordered by D.01-08-040 for trenching, conduit and pedestal costs should be stayed until resolution of this OII/OIR. In addition, in the event that the California Court of Appeal remands any part of the Hambly case back to the Commission, this proceeding will provide a forum to implement any refunds due tenants.
A final goal of this OII is to explore fair and reasonable ways to address the economic barrier that an MHP operator faces when converting a legally submetered delivery system to one directly metered by the local utility. MHPs can face significant expenditures to bring existing submetered systems into compliance with current construction standards such as GO 95 and GO 112. Although the tariffed discount is adequate to offset the average cost of replacing the MHP system, some MHP owners have failed to adequately finance the system upgrades needed before utilities will directly meter MHP tenants as utility customers. This goal is tempered by the conclusion we have already reached in D.95-08-056 modifying D. 95-02-090, that we would not order MHP owners to establish a reserve for infrastructure improvements.
B. Schedule
The schedule for this proceeding, which the assigned Commissioner or assigned administrative law judge may adjust, is as follows:
Phase 1
March 13, 2003
OII issued and mailed.
April 3, 2003
PHC Statements due
April 10, 2003
PHC Phase 1
Approx. April 18, 2003
Scoping Memo Phase 1
Approx. May 14, 2003
Concurrent Initial Briefs
June 6, 2003
Concurrent Reply Briefs /
Submission Phase 1
July 22, 2003
Phase 1 Draft Decision mailed
Dates to be set
Comments / Reply Comments on Draft Phase 1 Decision
August 21, 2003
Commission Meeting on Phase 1 Decision
Phase 2
Approx. September 3, 2003
PHC Phase 2
Approx. September 12, 2003
Scoping Memo Phase 2
Dates to be set
Parties Concurrent Prepared Testimony served
Approx. October 29, 2003
Evidentiary Hearings
Date to be set
Concurrent Initial Briefs
Approx. December 15, 2003
Concurrent Reply Briefs /
Submission Phase 2
Approx. February 15, 2004
Phase 2 Draft Decision mailed.
Dates to be set
Comments / Reply Comments on Draft Phase 2 Decision
Approx. March 15, 2004
Commission Meeting on Phase 2 Decision
We name as respondents to this proceeding all gas and electric utilities regulated by this Commission that provide gas or electric service to master meter customers for submetering to MHP tenants. Respondents and other persons or entities who intend to participate in the proceeding shall file and serve Preliminary Hearing Conference statements, and shall provide a courtesy copy to the assigned administrative law judge. The initial service list is attached hereto as Appendix A.
